Category Archives: Bitcoin
CBOE plans to launch bitcoin futures, announces agreement with Winklevoss brothers’ digital currency exchange – CNBC
The Wall Street Journal first reported news of the agreement Tuesday.
"We very much look forward to responding to the growing interest in cryptocurrencies through the creation of bitcoin futures traded on a regulated derivatives exchange," CBOE Holdings Chairman and CEO Ed Tilly said in a release.
CBOE Holdings' other subsidiaries include the Bats exchanges.
In late April, the U.S. Securities and Exchange Commission said it would review its rejection of the Winklevoss brothers' application to list a bitcoin exchange-traded fund on the Bats BZX exchange.
The SEC declined to comment.
"By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors," Gemini CEO Tyler Winklevoss said in the release.
On July 24, the CFTC announced it approved digital currency-trading platform LedgerX for clearing derivatives, which would mark the first federally supervised options venue for bitcoin.
LedgerX said at the time it plans to launch bitcoin options in early fall for institutional investors, although those firms could, in turn, offer retail investor products.
Bitcoin has more than doubled in value this year, while rival digital currency Ethereum has gained more than 2,000 percent. The value of all digital currencies has jumped from around $20 billion at the beginning of this year to more than $100 billion, according to CoinMarketCap.
Morgan Stanley thinks bitcoin is nothing more than a poster child for speculation – MarketWatch
Bitcoin may be the reigning prima donna of the crypto market, but at least one big Wall Street bank is not impressed.
A team of Morgan Stanley analysts led by James Faucette on Wednesday held up bitcoin BTCUSD, +0.87% as a poster child for speculation while downplaying its potential as a legitimate currency.
In a scathing report, the analysts noted that the number of online merchants accepting bitcoin has dropped to just three, from five a year earlier. During the same period, the value of the cryptocurrency has soared more than 250%.
The disparity between virtually no merchant acceptance and bitcoins rapid appreciation is striking, Faucette wrote.
He blamed the lack of bitcoins appeal for retailers on hoarding by investors given its rapid appreciation, as well as higher costs and slow transaction times.
But ironically, the main culprit may be its own skyrocketing worth.
The ecosystem has focused more on value speculation rather than the foot-leather-eating work of increasing acceptance way easier to trade speculatively than convince new merchants to accept the cryptocurrency, said Faucette.
Read: How big is bitcoin, really? This chart puts it all in perspective
In June, Morgan Stanley had warned that for digital currencies to join the ranks of other traditional investment tools, they must accept government oversight, although it did not articulate what that would entail.
Meanwhile, until those regulations are introduced, the debate over whether bitcoin is just another form of Monopoly money or a bona fide currency is likely to continue without a definitive conclusion.
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Morgan Stanley thinks bitcoin is nothing more than a poster child for speculation - MarketWatch
Photos: Life inside of China’s massive and remote bitcoin mines – Quartz
Taking advantage of the cheap and plentiful hydroelectric power that an army of computers require, bitcoin mining is spreading in remote parts of Chinas Sichuan province. In dark and isolated warehouses, bitcoin mining machines hum along solving equations to produce the highly valued cryptocurrency.
In 2016, Chinese photographer Liu Xingzhe spent time in Chinas bitcoin mines and with the miners themselves, who monitor the vast hallways of machines producing cryptocurrency for various clients. According to Liu, miners typically live in company dormitories for days at a timenot unlike the mining towns of yoreonly occasionally traveling dozens of miles to the nearest town.
Although increased government oversight has caused Chinese bitcoin trading to falter, the country remains an important player in bitcoin mining, thanks to cheap labor and computing power (paywall). Chinese clients who pay for bitcoins to be mined on their behalf can monitor progress remotely, using apps on their mobile phones.
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Photos: Life inside of China's massive and remote bitcoin mines - Quartz
South Korea Legalizes Bitcoin International Transfers, Challenging Traditional Banks – Bitcoin News (press release)
Starting next week, Bitcoin will be on the approved list of technologies that can move payments across the South Korean border. Fintech companies in the country will be able to obtain a permit allowing them to legally offer Bitcoin international transfer services.
Also read:South Korea Sets Up Task Force to Determine if Bitcoin Needs Regulations
Starting on July 18, the amended South Korean Foreign Exchange Transactions Act will enable fintech companies to register with the Financial Supervisory Service (FSS) to legally provide international money transfer services for small funds, The Herald reported an FSS official saying on Wednesday.
Once registered, companies can use various methods to send money abroad, including using Bitcoin. The amended law specifically permits digital currency remittances, which were illegal under the Foreign Exchange Transactions law, wrote online newspaper Dailian.
To obtain a permit, a fintech firm must have a paid-in capital of more than 2 billion won(approx. 1.75 mUSD at the time of writing) and a debt-to-equity ratio of below 200 percent, The Herald explained, adding that:
A one-off transfer via a fintech firm will be limited to $3,000 or less. By an account, an annual limit for international money transfers via fintech firms will be set at $20,000.
The amended law will allow new entrants to compete with traditional banks, offering money transfer services at a fraction of the incumbents fees, with a shorter transfer time.
For an overseas remittance of 1 million won, a typical bank commission is between 50,000 won and 60,000 won, Dailian detailed, adding that fintech companies are expected to charge between 3,000 to 40,000 won. It also takes banks two or three days to complete a transfer, the publication wrote.
Meanwhile, Bitcoin remittance service provider Coinone only charges a 1% commission fee and deposits are made within 3 minutes after requesting money transfer, its website shows.
Responding to new fintech competitors, Keb Hana Bank has limited some of its transfer fees to around 10,000 won, and Shinhan Bank is considering the introduction of a Bitcoin-based overseas remittance system, The Herald reported.Kang Mi-jung, a senior researcher at Hana Institute of Finance, commented:
Domestic banks need to find ways to provide remittance services for simple and inexpensive fees, and to establish new profit models through partnerships with fintech.
The worldwide money transfer industry is expected to grow to approximately $600 billion this year, according to research by Infosys.About 40 fintech firms are slated to launch international money transfer services starting on August 15, the news outlet reported FSS officials saying, adding that the move is expected to intensify competition in the 10 trillion won ($8.7 billion) international money transfer market.
Do you think Bitcoin remittances will overtake traditional bank transfers? Let us know in the comments section below.
Images courtesy of Shutterstock and Business Korea
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Cryptocurrencies Down 23% for July. Is This the Bottom? – Fortune
The great digital currency bull run of 2017 came to a screeching halt in early June. Shortly after hitting all-time highsbitcoin broke $3,000 and Ethereum nudged $400the party ended, and cryptocurrencies of all stripes plunged.
Now, almost two weeks into July, the picture is even less pretty as most types of digital money are firmly in bear territory.
How bad is it? Alex Sunnarborg, a researcher at Coindesk, tweeted a helpful chart that shows the respective declines for bitcoin and other currencies since the start of the month.
As you can see, bitcoin did not fare as badly as some of its smaller rivals. The original digital currency is down around 6.5% while Ether, the cryptocurrency associated with the decentralized computing network Ethereum, is down 29%. Ripple dropped a brutal 39%.
The average overall decline is approximately 22.7 %, though it's important to note some of these currencies are relative minnows. The market cap of bitcoin, the sector's undisputed heavyweight, is currently around $40 billion while that of Dash is $1.3 billion.
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All of this raises the question of what is driving the decline and whether the prices have bottomed out. Unlike earlier price jolts in the famously volatile digital currency market, there has been no obvious external shocka major hacking incident or a regulatory crackdownto explain the current decline.
As such, the dismal July may simply represent the deflating of a bubble inflated by lots of Johnny-come-lately speculators who rushed into the market in May and June. Now, some are suggesting that, in the case of Ethereum, the market has already hit bottom.
And indeed, in the past few days, the price of Ethereum has started nudging upward again, suggesting the prediction is right. On Wednesday, the currency had risen to around $220 from Tuesday's low of $192.
On the other hand, when it comes to bitcoin and Ethereum, it feels like anything canand doeshappen. (Did you see the guy photo-bomb Janet Yellon's remarks on Wednesday with a "buy bitcoin" sign?)
If you're a skeptic, you can take account of remarks this week by the chairman of BlackRock who called price charts related to blockchain-based companies "scary" and said bitcoin and Ethereum are in a bubble. Conversely, you can look to recent good news such as the IRS's decision to scale back Coinbase audits, and the lofty price targets set by Goldman Sachs, to think the crypto party is set to start all over again.
The only safe bet at this point is that cryptocurrency will continue to be a wild ride for investors for the foreseeable future.
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Cryptocurrencies Down 23% for July. Is This the Bottom? - Fortune
Bitcoin falls to near one-month low amid bubble concern, scaling … – CNBC
These miners are unhappy with SegWit and have suggested an alternative code change known as Bitcoin Unlimited. This would increase the block size significantly, but would also make their version of the bitcoin protocol incompatible with the original version.
As a result, a "hard fork" would take place, splitting the bitcoin blockchain in two, and even resulting in two separate coins. Investors would theoretically then hold some of the original bitcoin tokens, as well as the new Bitcoin Unlimited.
Each proposal requires large support from the participants in the bitcoin's ecosystem, but there is strong disagreement.
BTCC is a massive bitcoin exchange in China which signaled support for the SegWit proposal. Its CEO Bobby Lee told CNBC that he is "confident" a solution will be found, but the uncertainty could be a reason why the bitcoin price has paused for breath.
"Not everyone is on the same page, there are people worried, some may be selling bitcoin," Lee told CNBC by phone on Wednesday.
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Bitcoin falls to near one-month low amid bubble concern, scaling ... - CNBC
Bitcoin and three other investments that look like classic bubbles but actually aren’t – MarketWatch
Bubbles? Those arent bubbles.
Charles Schwab SCHW, -1.21% global strategist Jeff Kleintop says there are plenty of red-hot investments out there that might look like bubbles, but, in reality, they just dont fit the classic profile.
Bubbles typically bring risks for all investors, even those that dont own the inflating asset, he explained, because they represent a broader market and economy that has become out of balance and dependent upon a flawed outlook.
Previously, these bubbles of the past have inflated 1,000% over 10 years before bursting, cutting prices by more than half in the following two years, Kleintop explained. By the time they eventually popped, these investments had become fixtures across investors portfolio. Hence, the sweeping impact of their implosion.
As you can see from this chart, he pointed to the Nasdaq COMP, +0.27% crude oil CLQ7, +2.70% precious metals and home-builder stocks as obvious examples:
But what about those deemed bubbly in todays climate? Kleintop says the four most popular candidates are cryptocurrencies, low volatility, internet retailers and central bank assets. He applied his 1,000%/10-year filter to these investments
Remarkably, none of these seem to fit the classic profile of a potentially damaging bubble, he said. But that doesnt mean they dont carry risks for investors.
First, while bitcoin BTCUSD, -1.05% for example, has topped the 1,000%-return mark, it accomplished that feat much faster than the 10-year period.
Also read: Bitcoin rival, ethereum, has lost $17.5 billion in market value in 4 weeks
See also: Stay away from bitcoin and ethereum they are complete garbage
The shorter amount of time that it took may mean that if bitcoin is a bubble and were to burst it probably wont have as broad of a ripple effect on the economy as the technology or housing bubbles did, Kleintop said, pointing to this chart
Next, low volatility, specifically the VIX VIX, -1.98% is another area of concern. From one perspective, its 800% surge over the past 10 years pretty much matches the classic profile, but Kleintop says thats misleading.
While the pattern seems to line up fairly well with prior bubbles, he said, it would look different with a much larger rise and have more time to go until it reaches the 10 year time frame if I shifted the start date to the end of the bear market in March 2009, when volatility last peaked.
Then there are the internet retailers, like Amazon AMZN, -0.23% Clearly, these stocks have been on fire, but Kleintop says the relatively small size of the group keeps it from being a typical bubble and may limit the amount of damage a bubble pop would have on the broader market.
Unlike typical bubbles which tend to foster a purely optimistic outlook, these companies have already had a negative impact on the stocks of their traditional retail peers, leaving the overall retailing industry (composed of 10 sub-industries including internet retailers) up a smaller 500% over the same period, he wrote.
Finally, central bank assets, while clearly bloated by years of quantitative easing, dont exactly fit the mold, either. The balance sheets of the worlds central banks have grown about 300% over the past decade, coming up well shy of the 1000% level of the typical bubble.
The global buildup of debt most likely represents a long-term liability that threatens to exacerbate downturns, rather than a bubble about to burst, he noted.
Bottom line, Kleintop says that there doesnt seem to be any classic bubbles forming among the ones most commonly referred to as potential candidates. But remember that bubbles are sometimes only seen in hindsight, he said, which is why we always counsel diversification.
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Bitcoin and three other investments that look like classic bubbles but actually aren't - MarketWatch
Bitcoin rival, ethereum, has lost $17.5 billion in market value in 4 weeks – MarketWatch
Ether, the worlds second-most valuable cryptocurrency, has been tanking since hitting a peak in mid June, highlighting an extended selloff in buzzy, digital currencies that had been on a tear only a few short weeks ago.
Check out: How cryptocurrency ethereum looks set to overtake bitcoinin one chart
A single ether token on Tuesday briefly slipped to a six-week low, dropping under $200 and marking a 48% decline, giving up about $17.5 billion since reaching its best-ever market capitalization of $36.7 billion on June 14, according to data from Coinmarketcap.com. Most recently, one ether was trading at 202.37, down 4.3% on Tuesday, according to data from popular digital-currency data-provider Coindesk.
The downdraft for ether, which powers the ethereum blockchain and is the main rival to more prominent bitcoin, is occurring amid a broad slump in the cryptocurrency universe, which had racked up dazzling, quadruple-digit gains within a short period. Ethereums ether, for example, had surged by more than 4,000% -- from $8 in January to its June peak of around $400 -- before mounting its recent pullback.
Read: Wall Street laughed at a call for bitcoin at $25,000but after a 400% surge, the laughter is fading
Attention from large corporations, including Fidelity Investments, and flirtations with the possible inclusion in popular trading products, like exchange-traded funds, also have helped to stimulate interest in bitcoin and other cryptocurrencies.
However, worries about the speed of the advance for digital currencies, light regulation and a lack of broad usage has given many skeptics reason to call for caution in investing in bitcoin and ether, which some analysts say displays similar attributes to gold GCQ7, +0.21% viewed as a haven asset.
More broadly, the combined market value of an array of digital currencies, including ether, bitcoin, and others like ripple and litecoin, are down by about 28% to $82 billion currently from $114 billion last month. Bitcoin BTCUSD, -1.08% maintains a dominant position among so-called digital currencies, but has led the way lower, off 20% since surpassing $3,000 a coin mid-June.
By comparison, the Dow Jones Industrial Average DJIA, +0.00% has tacked on 0.7%, the S&P 500 index SPX, -0.08% has slipped 0.2%, while the Nasdaq Composite Index COMP, +0.27% has advanced 0.3% over the past month, despite a choppy trading environment marked by concerns about earnings growth and President Donald Trumps Wall Street-friendly agenda.
All that said, cryptocurrencies are still holding on to sizable returns, even factoring in the recent downdraft. The question is: are they facing a brief pause in their rise, or suffering through what will become an extended period of pain?
Wall Street analysts are split on the future for cryptocurrencies. Morgan Stanley analysts predict that they wont rally further unless they get governmental acceptance, including more regulation.
Meanwhile, Fundstrats Tom Lee, a Wall Street equity strategist, says bitcoin may trade at $55,000 a coin by 2022.
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Bitcoin rival, ethereum, has lost $17.5 billion in market value in 4 weeks - MarketWatch
Former MtGox Bitcoin exchange boss pleads not guilty – BBC News
BBC News | Former MtGox Bitcoin exchange boss pleads not guilty BBC News The former head of MtGox, once the world's biggest Bitcoin exchange, has pleaded not guilty in a Tokyo court to charges of embezzlement and data manipulation. Mark Karpeles was chief executive of MtGox when it collapsed in 2014, following the loss of ... Chief of bitcoin exchange Mt. Gox denies embezzlement as trial opens Mt Gox CEO denies embezzling millions of dollars of bitcoins Head of Mt Gox bitcoin exchange on trial for embezzlement and loss of millions |
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Former MtGox Bitcoin exchange boss pleads not guilty - BBC News
Cryptocurrencies need regulation, says CEO of Chinese bitcoin exchange BTCC – CNBC
Regulators are exploring ways to regulate these digital currencies, and some have flexed their muscles in recent months. Earlier this year, the People's Bank of China stepped up its efforts to regulate the market, including setting up a task force to carry out inspections and ensure bitcoin exchanges had implemented anti-money laundering systems, and warned several exchanges against violating rules.
Some saw the moves from the PBOC as an attempt to crackdown on bitcoin and part of Beijing's broader attempts to stem capital outflows. But Lee disagreed.
"It's not really a crackdown," he said. "The central bank previously was not very aware of the details of how bitcoin is utilized, how bitcoin is traded."
He explained that the surge in bitcoin prices coincided with the massive capital outflows from China and the exchange rate changes of the renminbi against the dollar.
"There was a causation and correlation issue. People thought bitcoin was causing it but after studying it more, I think the central bank has realized that bitcoin is not the cause of the change in exchange rate, nor is it the cause of the capital outflows."
Even then, some key voices in China are skeptical about the future of cryptocurrencies in the mainland. Earlier this month, reports said an adviser to the PBOC said virtual currencies like bitcoin are assets, but they do not have the attributes needed to be a currency that can meet modern economic development needs.
Lee said central banks need to embrace the fact that bitcoin is a new digital currency that's being traded actively in China and around the world.
"It's a new thing the central banks should pay attention to and figure out what the rules and regulations should be."
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Cryptocurrencies need regulation, says CEO of Chinese bitcoin exchange BTCC - CNBC