The bitcoin mining andcybersecurity firm MGT Capital has raised $2.4 million in new funding.

The financing for MGT Capital came as a result of a10 percent convertible note issued to a firm calledUAHC Ventures LLC. The funding, according to statements, will be used to expand MGT's bitcoin mining operations in the northwest US, where plentiful hydropower has attracted more than a few miners.

Bitcoin mining is an energy intensive process by which new transactions are added to the blockchain, with new coins being created as a reward for the miner that creates the next transaction block. Profits are earned when the proceeds of mining exceed the cost of electricity and other resources.

The company's leadership team includesJohn McAfee, who founded the eponymous anti-virus softwarefirm in the late 1980s. Intel went on to buy that company in 2010 for $7.6 billion.

In addition to mining bitcoin, MGTmines ethereum and ethereum classic, and is also developingcybersecurity products including a privacy-oriented phone.

In paststatements to the media, McAfee has struck a bullish tone on the prospects of his bitcoin mine, telling Bloomberg in a Mayinterview that "we will definitely be profitable before the end of the year." He also recently pushed back against arguments that the bitcoin market is in bubble territory.

Image Credit: Gage Skidmore/Flickr

Update:This article has been updated to reflect John McAfee's position withinthe MGT Capital leadership team.

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MGT Capital Raises $2.4 Million to Expand Bitcoin Mining Operation - CoinDesk

The price of digital currency bitcoin rose on Wednesday, putting it on track for a second straight daily increase, a rally that took total market capitalization of the entire cryptocurrency space above $150 billion.

Ether, the chief rival to bitcoin, which runs on the Ethereum network, also rose on Wednesday, and hit its highest level since June.

A single bitcoin BTCUSD, +1.82% rose 3.1% to $4,264.26. The move brings bitcoins year-to-date rally above 340%. However, it remains about 5% below an all-time intraday high above $4,500 hit on Aug. 17. At current levels, bitcoins market capitalization is about $69.8 billion, making it more than twice as large as Ether, its nearest competitor.

Trading in bitcoin has been volatile lately. At its low of the day on Tuesday, bitcoin was briefly pushed into correction territory, defined as a drop of at least 10% from a recent peak. The moves for bitcoin come as the industry has tackled so-called scaling issues, which are intended to increase transaction sizes in the blockchain network. Traditional bitcoin participants have coalesced around a new protocol known as Segregated Witness, or SegWit., which they believe solves bitcoins scaling issue.

Bitcoin Cash, an offspring created in response to bitcoins transaction-size issue, rose 0.3% to $664.95 on Tuesday, bringing its market cap to nearly $11 billion.

Ether on Wednesday rose 0.4% to $324.07, its highest level since June 23. While it remains below an all-time intraday high above $400 hit on June 12, it has more than doubled from a recent intraday low hit in mid-July. For 2017 overall, it is up more than 4,000%, bringing its market cap to $30.1 billion.

The recent gains in bitcoin, along with the recovery in Ether, brought the total market capitalization of all cryprtocurrencies above $150 billion, according to CoinMarketCap, a pricing and data website. The asset class first broke above $100 billion in early June, meaning the space has risen by half in a little more than two months.

Originally posted here:
Bitcoin and Ether rise, helping take crypto space above $150 billion market cap - MarketWatch

In BriefBitcoin is the world's most popular cryptocurrency, and its value continues to reach new heights. Here are a few reasons this relatively unknown digital coin was able to make the climb from obscurity to the mainstream consciousness.

So far, 2017 has been an eventful year for Bitcoin.

The platform recentlyendured a hard fork that saw it split in two and come out seemingly unscathed. Meanwhile, the cryptocurrency has risen from relative obscurity to become a popular topic of discussion in the mainstream, with everyone from Bloomberg to Forbes covering it regularly. The year isnt even over, and bitcoin has reached numerous milestonesalready, both in terms of its own history and that ofcryptocurrency in general.

Overall, Bitcoin seems to be steadily trending upward, with even greater heights predicted for the platforms future. So, how did a cryptocoin originally associated with the internets darkest corners become a popular contender for the future of financial and other transactions?

Longevity seems to play a factor. After years of trading, the coin has proven itself as here to stay, leading to years of value increases first a steady rise from 2012 through 2016, and then a more dramatic surge that is still ongoing today.

A cryptocurrency researcher who goes by the Twitter handle Jack Sparrow shared a comparative overview of just how fast bitcoins value has risen.

After it was created in 2009, bitcoin needed roughly seven years to reach a $2,000 valuation. However, the crypto saw the same level of increase from $2,000 to $4,000 in a matter of just 85 days.

The numbers are backed up, of course, by confidence fromlarger institutions. Big financial firms like Goldman Sachs, J.P. Morgan, and Fidelity Investments are now invested in the crypto, and nations such asChina, Japan, and, more recently, Australiahave started considering more permanent roles for cryptocurrencies in their respective economies as well.

All of this large-scale support is giving smaller organizations and individual investors confidencein the crypto.

The growing popularity of blockchain enterprise use has also contributed to the successes of Bitcoin and other platforms. As more institutions in the financial industry and beyondlook for ways to utilizethe decentralized and secure digital ledger, the cryptocurrencies that spring from these blockchains also get a boost.

Still, even with Bitcoins seemingly unstoppable successes, experts advise caution. As with any hot item, investing in bitcoin can be risky. Some, such as billionaire entrepreneur Mark Cuban and veteran investor Peter Schiff, even warn that the current cryptocoin craze is simply a bubble. However, while Schiff claims cryptocurrencies will never be money, many others thinkotherwise.

Are we witnessing the beginnings ofa truly cashless future? Only time will tell, and as with any revolution, Bitcoinhas many hurdles to overcome before it can truly transform our society. Right now, though, the crypto is clearly on the rise.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Here's Why Bitcoin Rose More than $1000 in Two Months - Futurism

For a long time up until recently, Chinese bitcoin exchanges didnt charge users transaction feesa major revenue source for other exchanges in the crypto market. How did they make a profit? At least part of the mystery has been solved.

Chinas two biggest bitcoin exchanges, Huobi and OKCoin, collectively invested around 1 billion yuan ($150 million) of idle client funds into wealth management productswhich are often high-yielding and riskyfor their own gain, state newswire Xinhua reported on Aug. 17 (link in Chinese), citing an investigation by the Peoples Bank of China. On the same day that the investigation was reported, bitcoin hit an all-time high of $4,500.

Yesterday (Aug. 21) Xinhua also published a rare commentary (link in Chinese) warning against bitcoins recent price surge. New things are developing so fast that regulations must keep pace, the article said, calling on the government to shut down dubious bitcoin exchanges and to never be soft on them.

Chinas central bank, fearing capital flight and money laundering, has tightened its grip on bitcoin trading in recent months. At the start of this year, the Peoples Bank of China launched an investigation into major bitcoin exchanges including Huobi and OKCoin, and issued warnings about possible risks on their platforms. In response, Huobi and OKCoin ended zero-fee trading and margin-trading services, which lets customers borrow yuan or bitcoin from the exchanges to boost their bets. The exchanges also suspended bitcoin withdrawals, and only reactivated them about two months ago. These moves ended Chinas dominance of the global bitcoin market, as measured by trading volume.

The Xinhua report didnt provide more details about the financial products Huobi and OKCoin invested in using those client funds. While bitcoin exchanges in the US and Europe typically hold client funds rather than use them, the same doesnt apply to their Chinese counterparts.

Huobi declined to comment. A representative for OKCoin didnt respond to a request for comment.

Employees of Beijing-based bitcoin exchanges and wallet apps, through which users send and receive bitcoin, told Quartz that their companies are now required to report to the central bank weekly about suspicious trading activities on their platforms. They are also anticipating that authorities will release new rules on bitcoin trading in Chinaa draft is now reportedly in the making. A 2013 central bank document contains some vague rules, such as requiring bitcoin exchanges to implement know your customer procedures, and abide by Chinas anti-money-laundering laws. The 2013 document also banned financial institutions and payment services from bitcoin-related businesses. That means Chinese banks are not allowed to serve as custodians and hold client money for bitcoin exchanges, a practice that is commonplace for Chinese stock brokers.

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China's two biggest bitcoin exchanges helped themselves to $150 million in idle client funds - Quartz

Even the skeptics cant avoid weighing in onbitcoin.

It seems like everyone is coming up with a price forecast these days, with some of the biggest banks including Goldman Sachs Group Inc. jumping into the action, while speculators to long-time investors are also making their bets.

The consensus is that the biggest cryptocurrency will face some resistance around $4,500 to $4,800 and correct, to then continue rallying. How high? Pantera Capital Managements Paul Veradittakit, Tom Lee at Fundstrat Global Advisors and John Spallanzani at GFI Group Inc. see it going to $6,000 by year-end, while Ronnie Moas at Standpoint Research says it will keep rising to $7,500 in 2018.

Bitcoin has been on a tear this year, more than tripling in value as it crossed the $4,000 mark and touched a record $4,477 last week. Its since retreated about 7 percent from the high as investors took profit and assessed whether the rally had gone too far. Growing adoption and institutional investor interest, agreement on a mechanism to speed up transactions and regulatory steps that will help the asset broaden its reach are some of the reasons that explain the gains.

Were in a very healthy position right now, saidVeradittakit, vice president of Pantera Capital, which has invested in bitcoin since 2014. Theres a lot of interest from traders and mainstream finance on the rise of all these new crytpo currencies, but when they first get exposure into the space, theyll go into bitcoin. It has the most liquidity and biggest brand name.

Veradittakit said bitcoin will hover around current levels and rally further once the underlying technology is upgraded in November, when the block size in the bitcoin blockchain is set to double to two megabytes, increasing transaction speed. Hes also encouraged by reports from the local exchanges Pantera invests in that cross-border transactions are increasing.

Read more about the bitcoin development dispute

But the road ahead might get rocky. Goldman Sachs technical analyst Sheba Jafari wrote in a note to clients Aug. 13 that bitcoin coulderase around 40 percent of its value after reaching $4,827. On a separate note, Goldman Sachs analysts said the space is getting big enough at over $100 billion in market capitalization that it warrants watching.

Spallanzani, chief macro strategist at GFI Group, also predicts a sizeable fall to as low as $3,000 unless it manages to break the $4,500 level it tested last week. But then it should rebound and climb to as high as $10,000 in 2018, he said.

It will have to retrace a bit more before we have enough power to break through, Spallanzani said. He recommends buying bitcoin when its above $3,800 and selling when its below that level.

Not everyone is so bullish. Roy Sebag, who said he first invested in bitcoin in 2011, said he sold most of his 17,000 bitcoin between May and June because he believes the long-term value will be zero.

Its completely devolved from the original promise, said Sebag, founder and chief executive officer of Goldmoney Inc., which oversees about $2 billion of assets. Bitcoin and cryptocurrencies in general are exhibiting a mania, fueled by speculative fervor.

Amid the frenzy, some analysts have steered clear of making price predictions, while still dipping their toes in bitcoin waters.

Read more on how to get exposure to bitcoin without owning it

Tom Price, a Morgan Stanley equity strategist, said bitcoin compares to gold in that both offer similar benefits as a store of value, such as being fungible, durable, portable, divisible and scarce. Still, a lot of time and trust-building will be needed before it becomes clear whether bitcoin will also undermine demand for the metal, he said.

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Cryptocurrencies including bitcoin are still very volatile and thus not particularly safe, but that could change as their value rises and liquidity increases, wroteBank of America Merrill Lynch strategists Martin Mauro, Cheryl Rowan and Matthew Trapp earlier this month. They score well when it comes to diversification, as their correlation to equities, bonds, commodities, currencies or selected measures of risk is near zero, the strategists said.

More longer term, bitcoin will climb to$25,000 by 2022, Fundstrats Lee said, as recent regulatory approval for options trading and settlement implies a significant rise in institutional holdings of bitcoin, while he estimates user accounts are likely to rise 50 percent and usage per account to climb 30 percent.

Moas of Standpoint Research said in an Aug. 14 report that bitcoin could rise to $50,000 by 2027 as he expects cryptocurrency users will grow to as high as 100 million users from 10 million today in the next couple of years.

It looks to me as though we are at the same point in the adoption curve as we were in 1995 with the Internet, Moas wrote. Cryptocurrency is becoming more widely accepted by the day.

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Bitcoin Analysts Compete for the Highest Price Forecast - Bloomberg