Bitcoin – British MPs launch inquiry into digital currencies

Bitcoin – British MPs launch inquiry into digital currencies

MPs have launched an inquiry into cryptocurrencies and the technology behind them.

The Treasury Committee said it wants to understand the risks and benefits of digital money following an explosion of interest – and investment – in them.

The MPs will cover the role of digital currencies in the UK, including the impact on consumers and businesses.

Although currencies such as Bitcoin have drawn criticism, the technology behind them has been praised.

Nicky Morgan, chair of the of the committee, said the MPs would look into how consumers and Britain's financial infrastructure might be better protected, without stifling innovation.

Last year's rapid rise, and subsequent fall, in the value of Bitcoin focussed attention on cryptocurrencies. They were variously dismissed as fraudulent, a "Ponzi" investment scam, and a vehicle for criminals and tax evaders.

Bank of England governor Mark Carney said Bitcoin had failed as a currency, but that the underlying technology which records and verifies the chain of transactions might prove useful.

Warren Buffett, the venerated investor, said the speculative cryptocurrency craze "will come to a bad end".

Divorcing couples may clash over Bitcoin

Ms Morgan said: "People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors.

"The Treasury Committee will look at the potential risks that digital currencies could generate for consumers, businesses, and governments, including those relating to volatility, money laundering, and cyber-crime.

"We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment."

But she also wants to strike a balance between protection and regulation, and not hindering the blockchain technology behind cryptocurrencies. "As part of the inquiry, we will explore how this can be achieved," she said.

The committee, which has yet to set a date for its first evidence session, will take evidence on key questions, including:

  • Are digital currencies ultimately capable of replacing traditional means of payment?

  • To what extent could digital currencies disrupt the economy and the workings of the public sector?

  • What risks and benefits could digital currencies generate for consumers, businesses and governments?

  • Could regulation benefit digital currency start-ups by improving consumer trust?

  • How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?

Source   BBC

 

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Bitcoin - British MPs launch inquiry into digital currencies

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Crypto Mining Craze Creates Global GPU Shortage

Crypto Mining Craze Creates Global GPU Shortage

Crypto Mining Craze Creates Global GPU Shortage

The cryptocurrency bull run of 2017 attracted multitudes of investors looking to get rich quick but it also created a mining boom that has resulted in a worldwide shortage of computer components.

 

Miners Plunder Singapore, Hong Kong For Cheap Rigs

Scores of miners from around the world come to the electronics bazaars in Asia to buy cryptocurrency rigs. Hong Kong’s Sham Shui Po and Singapore’s Sim Lim Square to name just a couple are jammed with people of all ages ordering specialized rigs.

This new demand for mining rigs has revitalized these electronic markets that were dying only a few years ago when shoppers turned online for computers, cameras, and gadgets of all kinds.

“It’s 30-50 percent cheaper to buy equipment related to crypto-mining in Hong Kong than in Europe,” Russian bitcoin miner Dima Popov said. This is because Hong Kong has no sales tax and is in close proximity to Chinese components manufacturers.

Miners are demanding more powerful rigs that can include up to 500 graphics cards each which has created a worldwide shortage of the cards allowing manufacturers and retailers to gauge buyers on the price.

 

Scarce GPU Cards Selling At Double Price

The market for high-end graphics cards used to work like anything else. You went to the electronics shop, found the card you wanted and paid just about the Manufacturer’s retail price. Today due to the escalating demand from mining you’ll most likely find the shelves that once held them bare but if you do actually what your looking for expect to pay a premium.

These high-end graphics cards are the most efficient way to mine cryptocurrency and as hobbyist miners and big players alike scramble to snatch up as many as they can prices go through the roof. Last summer popular GPU’s like the AMD Radeon RX 580 sold for about $250 at retail, today the price is more likely to be over $500 and that is if you can find them.

Checking the price of the 5 most popular graphics cards from last year and comparing it with the updated version shows a general price increase of between 70 and 100%. This leaves many wannabe miners trolling online for the best deals on new or even second-hand cards. Buying older cards though means slower computing ability which reduces the profitability of a rig.

Rigs using, for example, a high-end Nvidia Geforce GTX 1080 ti card costing around $1,300 (MSRP) can earn as much as $10 dollars a day at current crypto values. This means that the card may pay for itself in about 4 months.

String the math out and it’s easy to see how a fair sized rig can make a very nice profit over a year or more. Retailers reported a dip in demand for the cards during the crypto market correction but now that Bitcoin and it’s like are on the rise sellers and manufacturers are looking for demand to reach and surpass 2017.

Author JMCMAHON • FEB 21, 2018 • 05:02

 

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Trader Takes a Risk With Bitcoin, Becomes Cryptocurrency Billionaire

Trader Takes a Risk With Bitcoin, Becomes Cryptocurrency Billionaire

Trader Takes a Risk With Bitcoin, Becomes Cryptocurrency Billionaire
A mysterious investor who had recently purchased astonishing $400 million in bitcoin has just become a cryptocurrency billionaire.
Earlier this year, Bitcoin investors pressed the panic button when the cryptocurrency saw as much as 50 percent of the market lost amidst fears of growing regulations within the community.
Taking advantage of the collapse Bitcoin experienced over the first two months of 2018, the unnamed trader with the Bitcoin address 3Cbq7aT1tY8kMxWLbitaG7yT6bPbKChq64 purchased almost $400 million of the currency, apparently making a smart move, with the market now regaining momentum once again.

"Not sure who that big buyer was," founding partner of Tetras Capital Alex Sunnarborg told MarketWatch. "But many have bought this dip and have added since the rebound and additional regulatory clarity in the US and Asia".

Bill on "Cryptoruble" Introduced in Russia's Lower House of Parliament
The trader reportedly purchased about 41,000 bitcoins between February 9 and 12, increasing his balance from 55,000 coins to over 96,000. During that period Bitcoin's price was trading between about $8,600 and $9,000.
Cryptocurrencies nosedived at the beginning of 2018, weeks after bitcoin reached an all-time high of around $19,500. According to Fundstrat Global Advisors LLC's Tom Lee, Bitcoin may be well off its mid-December peak of $19,511, but it will be touching new highs again by July.    

Source Sputnik News

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Doge Is Helping Ethereum Solve Its Biggest Issue

Doge Is Helping Ethereum Solve Its Biggest Issue

Doge Is Helping Ethereum Solve Its Biggest Issue

A cryptocurrency modeled after a dog meme is proving yet again it's not just a joke.

Created on a whim in 2013, dogecoin isn't simply still around, it's playing a crucial role in the ongoing testing of at least one "serious" technology. In fact, on February 5, it notably factored into an experiment that successfully showcased one of ethereum's more enterprising projects.

On that date, the much-anticipated technology truebit successfully sent dogecoin to ethereum's Rinkeby testnet, where it became a distinct asset on that blockchain. A historic first, the transaction marked the completion of a years-long project developers see as a stepping stone toward the interoperability of crypto assets more broadly.

Nicknamed the "dogethereum bridge," the test also marks the first real release for truebit, which aims to solve one of ethereum's biggest problems: scalability.

In short, the smart contract platform can't support many users right now. Indeed, because of all the data ethereum needs to store in its globally distributed database, it requires more than three times as much data as bitcoin, and that's making it more difficult for users to run.

Though truebit is lesser-known than scaling solutions like raiden and sharding, the technology is perhaps more ambitious because it's designed to scale any type of ethereum computation, rather than just transactions. This is key, since ethereum bills itself as more than "just" a financial cryptocurrency.

In the long run, truebit wants to scale video, machine learning or just about any computation you can think of, and dogethereum is the first use case, so far.
 

Truebit co-founder Jason Teutsch:

"We built a first version of that, which we're calling 'truebit lite.' It demonstrates that all the core pieces of truebit work. It's a big milestone for us."

$1 million on the line

Backing up, the history of dogethereum is an interesting one.

In the heyday of dogecoin (back when its thriving community could pool together $30,000 in donations to fund a bobsled team), Ethereum Foundation UX designer Alex Van de Sande got together with other developers and set a bounty to incentivize someone to come up with a way to move coins from dogecoin to ethereum and back.

The group locked up the funds in a DAO, a kind of application that runs on ethereum, enabling money to be spent only once specific rules are met. In this instance, the funds were set to only be released if five of the DAO leaders vote to do so by signing approval with their ethereum private keys.

Since the price of ethereum ballooned over the years, the smart contract holds ether worth about $1.2 million today. But no one's received the bounty so far, primarily because running dogethereum in an efficient way has proven to be a much more difficult problem to solve than expected, as Van de Sande pointed out in a string of tweets describing the project's origins.

The heart of the issue is it's too computationally expensive to validate a coin going from one chain to another – and back again – costing millions of dollars in ether. In order to solve this problem, it needs to be less expensive to run computations on the ethereum blockchain.

"This [bounty] kicked off a two- or three-year discussion about how best to implement it," said truebit developer Sina Habibian, adding:

"Dogethereum is representative of a larger problem of how to run big computations."

And dogethereum is how truebit was born – the seemingly silly bridge sparking Ethereum Foundation developer and truebit co-author Christian Reitwiessner's interest in designing a scalability layer on top of ethereum.
 

The big test

Truebit developers might be getting close to snatching the dogethereum bounty, though, since some successful tests on the Rinkeby copy of the ethereum blockchain have been executed.

The only other step is doing it live.

Truebit built a dogecoin light client, a smaller version of the blockchain that slashes most of the historical data, embedding it in the doge relay so it can securely move coins from chain to chain.

Yet, Truebit's developers stressed the challenging aspect of what they've accomplished, arguing that the dogethereum bridge is different than decentralized exchange via atomic swaps, an idea that's been gaining ground of late. Rather, it's more like sidechains, a long-stalled bitcoin technology.

"We want to actually pull coins off of the dogecoin blockchain and put them onto ethereum in the form of ERC-20 tokens," Teutsch explained. "And be able to move them back."

"You don't need a counterparty. You're doing this completely on your own," Habibian added.

To accomplish this, there has to be some way of locking coins on dogecoin so that they cannot be spent until they are sent back from ethereum. But that's not the most difficult part. What remains computationally expensive is proving that the owner of the dogecoin owns the ether coins on the other side.

They then executed a transaction on the Rinkeby testnet, sending the dogecoin to ethereum – and back again – using truebit under the hood, so the normally expensive proof is executed off-chain, in a much cheaper way.
 

No estimates

Despite the public debut for the scaling project, though, the team behind truebit still has their work cut out for them.

In this first version of the technology, the incentives are "greatly simplified," Habibian said.

In the technology they have ready today, some of the participants are behaving "altruistically." That is, the system's verifiers are performing expensive computations just to be nice.

And while that probably wouldn't work in practice, truebit's goal is to one day create a marketplace where participants are paid for doing computational work on their computers and contributing correct results.

"People will come out of their own self-interest to run these computations and make money in return," Habibian said.

So, when will all that be ready exactly? Habibian wouldn't give an estimate for how long it will take to launch for real on ethereum.

"It's always hard to make estimates like that because one of the rules of software engineering is, 'However long you think something's going to take, it'll take three times as long,'" he said.

Still, he revealed truebit plans to release new software programs iterating on this milestone in the coming months now that the startup has teamed up with decentralization startup Aragon and ethereum-based video service LivePeer.

That's how they think the technology will spread at first, beyond dogethereum, marking a big step for truebit – and potentially ethereum too.

As Habibian told CoinDesk

"When it's done and it's fully built, you'll be able to run any computation on ethereum."

 

Author Alyssa Hertig Updated Feb 19, 2018 at 03:41 UTC

 

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CFTC Warns Against Cryptocurrency Pump-and-dump Schemes

CFTC Warns Against Cryptocurrency Pump-and-dump Schemes

CFTC Warns Against Cryptocurrency Pump-and-dump Schemes

The rising popularity of cryptocurrencies is of great concern. Especially when it comes to pump-and-dump schemes, there’s reason to be concerned. As such, the CFTC issued an official warning against this type of market manipulation. They advise customers to avoid such schemes, especially when it comes to small and new altcoin markets. It is evident doing one’s research is always the best course of action.

In the world of cryptocurrency, pump-and-dump schemes are nothing new. In fact, they are a lot more common than some people might think. The CFTC has issued an official warning on this topic earlier this week. This is quite a surprise, even though it is evident consumers need to be aware of these manipulative efforts. Especially smaller cap coins and new alternative cryptocurrencies pose a significant risk in this regard. Moreover, it is always best to avoid any promotion on social media altogether.
 

Avoiding Cryptocurrency Pump-and-dump Schemes

This seems to stem forth from the recent BitConnect issues. That pump-and-dump scheme caused hundreds of millions in financial losses. It was mainly promoted on social media and YouTube. The CFTC doesn’t want history to repeat itself in this regard. They now want consumers to blow the whistle on any suspicious currencies first and foremost. It’s always better to submit tips than ignore pump-and-dump schemes altogether. Whether or not the general public will follow this guideline, remains to be seen.

According to the CFTC, pump-and-dump schemes in the cryptocurrency world take place on social media first and foremost. Online chat rooms, such as the ones on Telegram, are also problematic in this regard. Ignoring these buy signals will prove to be rather difficult for a lot of novice users. It is these people the marketers and scammers prey on first and foremost. A lot of people never do any research for specific coins or projects, even though they really should.

For now, the CFTC will not undertake further action against pump-and-dump schemes. They are not in a position to do so either, unfortunately. It is evident users need to conduct their due diligence first and foremost. Those who purposefully defraud other investors will face legal issues sooner or later, though. Anyone participating in market manipulation also violates the law. It is evident this new financial industry needs some boundaries first and foremost. Cracking down on pump-and-dumps is the right way to go in this regard.

 

Author JP BUNTINX • FEB 18, 2018 • 03:02

 

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What Could Lift Bitcoin, Ripple, Ethereum, And Litecoin Prices Back Towards New Highs

What Could Lift Bitcoin, Ripple, Ethereum, And Litecoin Prices Back Towards New Highs

The cryptocurrency party is on again.

After being in a deep correction for a few weeks, Bitcoin, Ethereum, Ripple, and Litecoin have been coming back nicely over the last week, gaining 19.87%, 10.48%, 30.57%, and 53.90% respectively—see table 1.

 

Table 1
 

7-Day Price Change For Major Cryptocurrencie

Source: Coinmarketcap.com 2/16/18 at 10:30 a.m.
 

The turnaround in cryptocurrency markets comes as equity markets rebounded from the sell-off early in the month, with NASDAQ gaining close to 5% in the last five days—see table 2.
 

Table 2

Source: Finance.yahoo.com 2/16/18 at 10.30 a.m.
 

Most notably, the cryptocurrency “technicals” remained strong, with 83 cryptocurrencies advancing and only 17 declining among the top 100 listed currencies—see table 3.
 

[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don't own any Bitcoin.]

 

Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks

The strong rebound in major cryptocurrencies is a cause of celebration for investors who purchased near the market bottom.
 

How long will the party last? Will major cryptocurrencies prices test the old highs? It’s hard to tell. Still, there are a few scenarios that could help major cryptocurrencies move in that direction.

One of them is the proliferation of Wall Street products like ETFs and Futures contracts that will allow a broader investor participation in cryptocurrency markets. In fact, it was the introduction of Futures contracts that created a great deal of buzz for major cryptocurrencies last December, and taking some of them to new highs.

Another scenario is an improved access to cryptocurrency exchanges that will ease the difficulty of buying cryptocurrencies by the average investor. “The biggest tailwind I can see right now is greater acceptance of cryptos by mainstream investors and improving ease-of-access to the crypto exchanges,” says Jesse Cohen Senior Analyst with Investing.com. “Trading app RobinHood for example has a waiting list of around 1.2 million users for its new crypto trading service, which would allow easy, quick and most importantly safe investing in all the major coins."

A third scenario is the adoption of cryptocurrencies as a medium of payment by major merchants. Already, there has been talk that Starbucks and Dunkin Donuts are considering accepting Bitcoins for their products.

While all this talk sounds like pie in the sky, the likelihood for one of these companies to adopt a cryptocurrency is very appealing, for an obvious reason: it will create a great deal of buzz among younger customers.

And it will drive cryptocurrency prices higher, provided that big governments, big banks, and hackers do not spoil the party again.

 

Author Panos Mourdoukoutas ,

 

 

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Bitcoin Price Technical Analysis for 16th Feb – One More Hurdle to Clear

Bitcoin Price Technical Analysis for 16th Feb – One More Hurdle to Clear

Bitcoin Price Key Highlights

  • Bitcoin price has broken past its inverse head and shoulders pattern neckline to show that an uptrend is in the cards.

  • Price is hitting another upside barrier at its descending trend line, though, and this might prompt profit-taking.

  • Technical indicators are also suggesting that the rally is overdone.

  • Bitcoin price is testing the descending trend line on its 4-hour time frame, and moving past this hurdle could mean more gains.

 

Technical Indicators Signals
 

The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This suggests that the downtrend is more likely to resume than to reverse.

The 200 SMA also lines up with the descending trend line to add to its strength as resistance. This means that it would take a strong catalyst to trigger and sustain an upside break.

Stochastic is indicating overbought conditions, though, so selling pressure could still pick up. Similarly, RSI is in the overbought region and looks ready to turn lower, so bitcoin price might follow suit.

Market Factors
 

Bitcoin price has drawn a lot of support from easing regulatory concerns, stemming from the US Senate hearing and remarks from South Korean officials suggesting that they are open to introducing something like BitLicense.

Recall that Commodity Futures Trading Commission Chair Christopher Giancarlo and Securities and Exchange Commission Chair Jay Clayton mentioned that they have no plans on banning bitcoin. Instead they plan on regulating the industry without quashing development.

More positive updates like these could help improve the sentiment in the industry. Apart from that, the continuation of risk-taking in higher-yielding assets like stocks and commodities has also benefitted bitcoin.

Besides, the move all the way to the $10,000 area of interest could bring more buying interest as this could signal an end of the correction. A sustained move past the next $12,000 area of interest could confirm that buying momentum is in play, attracting even more buyers.

Author SARAH JENN • FEB 16, 2018 • 05:02

 

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Cryptocurrency latest – Unprecedented Bitcoin legal battles BAFFLE top regulation lawyers

Cryptocurrency latest - Unprecedented Bitcoin legal battles BAFFLE top regulation lawyers

Cryptocurrency latest – Unprecedented Bitcoin legal battles BAFFLE top regulation lawyers

UNPRECEDENTED legal battles are set to take place in the UK after it was reported that divorce lawyers are struggling to come up with settlement agreements over cryptocurrencies.

The unusual legal cases are said to concern at least three couples looking to legally separate.

One pair has a fortune of £600,000 in cryptocurrencies that they are currently struggling to agree how to split.

The lack of regulation surrounding the digital currencies means that there is little legal cover for those looking to protect their online assets in the case of a divorce.

Bitcoin, Litecoin, Ripple and Ethereum are all understood to be at the centre of online money involved in the divorce cases.

Vandana Chitroda, a partner at the law firm Royds Withy King, said: “These are the first cases we have seen, and we expect to see many more.

“We believe that cryptocurrencies will be a significant feature in a large number of divorces.

“Whilst cryptocurrencies are volatile, they are not going to go away.”

Bitcoin has dramatically seen its value plunge throughout 2018 from a record high of nearly £15,000 in December 2017 to now under £7,000.

However, there is evidence to suggest the number of people investing in cryptocurrencies is rising.

Ms Chitroda added: “It is important that if you believe your husband or wife has invested in or purchased cryptocurrencies, such as Bitcoin, and you are separating, you tell your legal adviser.”

Countries around the world are currently looking at implementing regulation for digital currencies in an effort to catch up with the latest financial craze.

The finance minister and Central Bank Governors of France and Germany have requested that talks on policy and monetary implications of cryptocurrencies be part of G20 talks in March.

They want world leaders to come up with a global strategy for the online assets.

Some countries have already begun to act unilaterally to increase regulation.

South Korea introduced a raft of measures last month aimed at regulating Bitcoin and similar currencies such as Ripple and Ethereum.

A ban on anonymous trading was implemented by the Asian power in a bid to crack down on all possible criminal activities the secret nature of trading Bitcoin allowed.

Meanwhile, India’s Government has said it does not consider cryptocurrencies to be legal tender and will try to phase out payments using the online money.

 

 

 

Author DAN FALVEY UPDATED: 05:29, Thu, Feb 15, 2018

 

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Bitcoin Price Technical Analysis for 14th Feb – Sitting Tight for a Breakout

Bitcoin Price Technical Analysis for 14th Feb – Sitting Tight for a Breakout

Bitcoin Price Technical Analysis for 14th Feb – Sitting Tight for a Breakout

Bitcoin Price Key Highlights

  • Bitcoin price is currently consolidating, forming higher lows and lower highs inside a triangle pattern.

  • Price is bouncing off support and might be due for a test of resistance soon.

  • Technical indicators are also suggesting that the bounce could take place, possibly even leading to an upside break.

  • Bitcoin price is finding support at the bottom of its triangle consolidation and may be due for a move past the resistance if buyers are strong enough.

 

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This means that support is more likely to hold than to break. It could also indicate that the top of the triangle could be broken.

In addition, the 100 SMA is currently holding as dynamic support and keeping losses in check as it lines up with the triangle bottom. A break past the $8,000 level could be enough to signal a bullish break and further gains.

Stochastic is pointing up to signal that buyers are in control of bitcoin price action while RSI also seems to be turning north. However, hitting overbought levels could draw sellers back in and lead to a move back to the triangle support.

Market Factors

Equities still closed slightly in the green to confirm that risk appetite extended its stay in the financial markets. Note that bitcoin has been tracking these higher-yielding assets these days instead of taking risk-off flows.

But as mentioned, the gains were smaller this time, signaling a slowdown in momentum and a potential correction. US CPI and retail sales figures are up for release and apart from influencing USD price action, it could also have a significant impact on overall sentiment.

Other altcoins like litecoin are starting to enjoy a bit more bullish support, so it’s possible that bitcoin could follow suit. Analysts point to easing concerns about regulation as the crackdown news in South Korea are no longer hitting headlines as one of the factors propping prices up.

 

Author SARAH JENN • FEB 14, 2018 • 04:02

 

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Bitcoin Price Analysis – The bottom is likely in

Bitcoin Price Analysis – The bottom is likely in

Bitcoin (BTC) has risen ~50% over the past week following a ~60% drop throughout early January and February. The leading cryptocurrency now has a market cap of ~US$150 billion, with over US$3.5 billion traded over the past 24 hours.

The mining sector is heating up rapidly all over the world, bringing additional decentralization to an industry that has been concentrated in China for many years. While being compared to a gold rush, there is an increasing focus on hardware and energy demands.

Nvidia stock continues to soar, in part due to GPU mining demand. Nvidia CEO Jensen Huang admitted crypto was a “real part” of their business in Q4 2017 and that, “crypto is a real thing, it’s not going to go away.” Later this month the Toronto stock exchange will list the Vancouver-based Hut 8 Mining Corp, a company backed by Georgian mining company Bitfury – one of the main competitors of China-based Bitmain.

In order to maximize returns, miners are generally concentrated where electricity is cheap. These geographic locations typically have renewable or alternative energy sources, as is the case in Washington State and Iceland.

Washington State has seen a large uptick in mining activity recently due to relatively cheap hydroelectric power and a large quantity undeveloped land. Mining is slated to become a multimillion-dollar business in Chelan County, where the local power provider, Chelan Public Utility District (PUD), is dealing with a surge of requests to build large-scale mining facilities. The county of 72,400 residents already has 16 cryptocurrency mining operations up and running.

Iceland may be using more power to mine BTC than they use to power homes by the end of 2018, according to reporting from the BBC. Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, said that there is so much demand for BTC mining data centers in Iceland that the country wouldn't have enough electricity to supply them all were they to be built.

Japanese e-commerce company DMM also announced plans for a 1,000 unit mining farm in the Ishikawa Prefecture, taking advantage of low ambient temperatures and cheap electricity costs, while Italian utility company Enel Italy has decided against selling power for the purposes of cryptocurrency mining as it is an “unsustainable practice that does not fit with the business model.”

While mining operations across the globe expand, crypto has entered the zeitgeist of several central bankers and economists. The previous U.S. chair of the Federal Reserve, Janet Yellen, held a hawkish stance on BTC, calling it a “highly speculative asset” that “doesn't constitute legal tender.” The Executive Director of the Oesterreichische Nationalbank, Austria’s central bank, agreed. Kurt Pribil said that “bitcoin price is pure speculation.” French and German finance ministers have also raised concerns over education and risk management, and plan to propose restrictions on BTC at the Argentinian G20 meeting in March.

International Monetary Fund chief Christine Lagarde believes international crypto regulation will be necessary and “inevitable,” in regards to activities involving dark markets rather than crypto itself. President of the European Central Bank (ECB), Mario Draghi, has a warmer approach, suggesting “banks will show positive interest” and that the ECB cannot and will not regulate BTC.

Arizona state legislators have taken a warmer stance as well. A bill recently passed into legislation that allows taxes to be paid using cryptocurrencies. Several Libertarian-leaning U.S politicians have already accepted campaign donations in BTC, including; Colorado Democrat Jared Polis in 2014, Kentucky Republican Rand Paul in 2016, and most recently, Missouri Republican Austin Petersen.

In the meantime, the European Union Agency for Law Enforcement Cooperation (Europol) and other police agencies remain focused on money laundering and other illicit activities using cryptocurrencies. The Executive Director of Europol, Rob Wainwright, estimates that about 3-4% of the £100bn in illicit proceeds in Europe are laundered through cryptocurrencies.

In the U.S., a resident of Ohio was recently arrested for allegedly running a fake ID ring where US$4.7 million of BTC was confiscated. In Russia, scientists were recently arrested for using a nuclear supercomputer to mine BTC. Computers within nuclear facilities are rarely connected to the internet as a preventative measure against hacking. However, the scientists apparently connected the computer and were promptly arrested.

In less nefarious bitcoin adoption this week, real estate sales for BTC transactions also continue to increase. A Florida company recently completed its third bitcoin-only transaction, selling a Miami townhouse for 41.35 BTC, or US$338,878. A previous bitcoin-only Miami transaction included a penthouse for 33 BTC, or US$547,000 at the time. Fifty luxury apartments were recently sold for BTC in Dubai as well, with one buyer taking 10 units.

However, banks outside the U.S. have begun to ban BTC purchases with credit cards, including the Bank of Ireland as well as several banks in the United Kingdom. Pantera Capital CEO, Dan Moorehead, continues to remain extremely bullish saying, “there’s such an institutional appetite to get exposure to this. It’s a half a trillion dollar asset class that nobody owns. That’s a pretty wild circumstance.” Institutional traders continue to gain exposure to crypto through CME’s BTC cash-settled futures.

Exchange traded volume this week has been led by U.S. Dollar Tether (USDT), U.S. Dollar (USD), and Japanese Yen (JPY) trading pairs.

Over the counter volume globally is nearing record highs set in December.

Technical Analysis

The current BTC trend is roughly neutral, based on high timeframe metrics. Indicators such as the Ichimoku Cloud, Exponential Moving Averages (EMA), Relative Strength Index (RSI), Pitchfork, and basic chart patterns help determine entry and exit points, as well as the state of the trend.

The Ichimoku Cloud on the weekly chart remains bullish, but its metrics do not provide any long entry or exit signals. Price bounced off the 50 day EMA, and 50 on the RSI, for the first time in several months. This indicates a sustained bull trend with a complete momentum reset. Bullish continuation is likely if the 50 level on the RSI continues as support. The previous weekly candle formed a dragonfly Doji, a bullish reversal candle, which will be confirmed as a reversal following a consecutive green candle this week.

The Ichimoku Cloud metrics on the daily chart are all bearish. Although this would typically trigger a short entry, the distance of price from the Kijun suggests that the asset remains heavily oversold. An optimal short entry would occur when price returns to, but does not breach, the Kijun. This would indicate bearish continuation.

February 6th also marked the highest daily trading volume since China banned trading in early 2017. Volume spikes such as this are highly suggestive of an interim trend reversal, as was the case on September 15th.

The next long entry signal indicated by the Ichimoku Cloud on this time frame, will not trigger until all its metrics flip bullish again. This may not occur for several weeks. The Kumo twist on March 6th is the zone with the highest likelihood of price breaching the Cloud. If price is below the Cloud at that time, it will treat this zone as a magnet for upward momentum. Price is also currently near but below the 200EMA, a litmus test for trend status.

 

A Pitchfork on the daily chart with anchor points in February, May, and July shows price reaching the 1.618 level on the recent drop. The 1.618 level is borrowed from Fibonacci extensions and was also roughly seen as resistance at US$15,700 and US$17,000.

Buying in the current zone comes with the risk of a bearish invalidation of the Pitchfork. A significant break below the lowest diagonal support would invalidate the Pitchfork entirely. The upside potential is a return to the median line, followed by a test of the upper limit.

A bullish reversal pattern, the inverted head and shoulders, with a 1.618 fib extension and measured moves of US$11,500 and US$13,105, continues to form. The horizontal levels of this pattern strongly correlate with support and resistance levels from previous order blocks.

Lastly, market cycles are loosely correlated with the OKEX (previously OKcoin) quarterly futures expiration dates. January and July have preceded the beginning of relative bearish reversal periods (red), whereas April and October have preceded the beginning of relative bullish reversal periods (green). This has occurred irrespective of the macro trend.

Conclusion

The ever-expanding mining data centers across the globe continue to add pressure to regional power supplies. Although mining profitability will inevitably be affected by any rise in the cost of power, the additional investment in the crypto industry lends sustainability to the industry as a whole.

Following the generally dovish Senate hearing on cryptocurrency last week, regulators around the world continue to reveal their positions. While most regulators have adopted a wait and see approach, law enforcement continues to report on illicit activities, in spite of the relatively minor use of cryptocurrency.

Technicals are neutral based on the trend metrics with a complete momentum reset. Exchange-traded and OTC volume continue to sustain levels seen during the ATH period in December. Low timeframes show a bullish reversal pattern which should conclude within the next 24 hours, eventually bringing BTC back above US$10,000 once the pattern completes.

 

Author osh Olszewicz, 13 Feb 2018

 

Posted by David Ogden Entrepreneur

 

David