New York Times | Ask the Sketch Guy: Should I Finally Buy Some Bitcoin? New York Times To kick off things, Shawn Cook from San Diego asked a question about Bitcoin. (For an explainer on Bitcoin, see this article by Nathaniel Popper of The New York Times, who literally wrote the book on the topic.) His hipster friend is constantly bugging ... |
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Ask the Sketch Guy: Should I Finally Buy Some Bitcoin? - New York Times
A bitcoin ATM in Barcelona in 2014.
Josep Lago/AFP/Getty Images
Back in early 2014, thanks to a confluence of digital malfeasance and wide-eyed optimism, bitcoin enjoyed a nice run in the headlines. Things have since quieted in the popular press, but venture capitalists, entrepreneurs, and speculators have continued to work toward the promise of a secure, fast, and cheap payment system that cuts out fee-hungry banks and credit card companies. Following Bitcoins lead, theyve built dozens of competing cryptocurrency systems, and while digital coins arent part of most peoples everyday lives today, its increasingly clear that they will be, sooner or later.
Bitcoin itself, however, wont necessarily be part of the future it has ushered in. A broad surge in cryptocurrency values pushed the original recipe north of $40 billion in late May, but a long-standing issue that limits the systems capacity has left it struggling to give users what it says on the tin: a cheap, quick way to move money. Because bitcoin is open-source and democratically managed, a huge number of stakeholders are wrangling over how to solve this scaling crisis, which hinges on an obscure technical parameter.
In response, the bitcoin community has split into two factions that tout mutually incompatible solutions while accusing each other of incompetence, conspiracy, self-aggrandizement, and generally being the devil. On March 17, more than two-dozen bitcoin marketplaces issued a joint letter warning that there is a very real possibility that a Bitcoin network split may occur in the future if the conflict isnt resolved. It was one of the first high-level acknowledgments that, just as it begins to fulfill its promise, Bitcoin could be torn in half.
The idea of a Bitcoin split, or the extremely personal infighting that has made it a possibility, would have seemed laughable just a few years ago. Then, a tight-knit crew of bitcoin pioneers gleefully nerded out over an arcane innovation with world-changing potential. At the heart of bitcoins radical promise is the so-called blockchain, essentially a ledger where transactions are recorded. But instead of some spreadsheet living on a single computer, the blockchain exists on thousands of servers worldwide that constantly monitor one anothers copies of the ledger. This makes the network essentially unhackablean astonishing achievement of computer science and economic engineering.
Since a still-anonymous creator introduced bitcoin in 2009, its central innovation has given birth to a diverse and thriving ecosystem. There are now dozens of other cryptocurrency systems, with names like Ethereum, Dash, and Ripple, many with more features than Bitcoin. Perceived instability in Bitcoin could eventually push investors and developers to these alternatives. But more profoundly, Bitcoins inability to solve its own problems would cast doubt on its core libertarian-democratic premise: that people dont need the government or banks to manage their currency.
If Bitcoin were to split, it will be because it was just too successful for its own good. Public interest and transaction volume has grown more or less steadily for the past five years, and the blocks that make up the blockchainbundles of about 2,000 transactions compiled every few minutesare getting very crowded. Some transfers can currently wait hours, even days, to go through.
Users can pay a fee to have their money moved first, through a bidding process that is becoming increasingly fierce. Before 2014, bitcoin transactions were effectively free. By October, users had to pay operators about 13 cents to get speedy resolution. Today, that average fee is closer to 50 cents. That removes some of bitcoins appeal as an alternative to, say, Visa, which charges merchants about 10 cents for small transactions or about $1 for the average swipe.
Almost everyone admits this is a problem, but bitcoiners are divided into two camps over how to solve it. One faction is led by Roger Ver, a very early funder of Bitcoin startups who has relentlessly proselytized for the technology since 2011. Among the cultish ranks of bitcoin boosters, Vers commitment and vision earned him the nickname Bitcoin Jesus. Now, he has taken up the banner of Bitcoin Unlimited, a solution to the scaling issue that would directly increase the codes limit on how much data a block can hold.
While this would make bitcoin faster and cheaper for users, critics say it would also make it more expensive to run a server. For this heresy, Vers enemies have rechristened him the Bitcoin Antichrist. One of his main allies, the Chinese server manufacturer Jihan Wu, has been similarly dubbed Jihad Wu, complete with a satirical Twitter account that paints him as an ISIS-style terrorist.
The main competing proposal is offered by Bitcoins central development team, Bitcoin Core, and is known as Segregated Witness, or SegWit. It would free up a smaller amount of space for transactions, while making it easier for secondary systems to handle smaller transactions outside of the main, super-secure blockchain. But it could leave bitcoin proper nearly useless for small transactions.
This may sound like a technical squabble among quislings. But the two solutions imply two fundamentally different visions of what bitcoina system that currently has a higher market value than Credit Suisseshould be. Those who support Vers vision of larger blocks want bitcoin to be a day-to-day, open payments network, usable to buy anything from a cup of coffee to a car. Those who support SegWit are more likely to see bitcoin as digital gold, a long-term store of value that wouldnt move around that much. That would leave fees high but make paying them less necessary, while relying more on secondary systems.
The two factions congregate on separate, opposing Reddit forums where they each tout their solution while meme-trolling the enemy. Each accuses the other of sockpuppetingusing fake social media accounts to create the impression of popular support. (And each side, of course, denies in engaging in such behavior.)
If Bitcoin were a company, youd expect the CEO to sort out his or her underlings petty backbiting. But Bitcoin has no leaders. Instead, the miners that run Bitcoins servers essentially vote on any proposed changes. For years, the consensus version of the software was distributed by the slowly rotating Bitcoin Core team and adopted with little controversy. Core had no official authority, but its expertise was broadly trusted.
But many miners have lost faith in Core, accusing it of moving too slowly to tackle the scaling issue. According to tracking site Blockchain.Info, a little more than 40 percent of miners are currently signaling their support for Bitcoin Unlimited, compared with only 30 percent signaling for SegWit. If more than 50 percent of miners were to support Bitcoin Unlimited, they could force a shift in the entire network. Ver, though, says he would like to see much more decisive margins of support before any changes are implemented, and SegWit requires support from 95 percent of miners before it can be activated.
With each faction so firmly entrenched, theres no sign things will sharply swing either way any time soon. But a smaller group of miners could branch off to form a separate network and an entirely new currency. This split, known as a hard fork, is what the exchanges that issued the March letter were planning for.
Not everyone thinks a hard fork would be a bad thing. Anthony Di Iorio was one of the founders of Ethereum, the most prominent system to innovate on bitcoins core ideas. Should there be a hard fork, he predicts, youre going to have better growth. [Users] will be able to decide. Competition is good. Ver, unsurprisingly, describes a fork as not a big problem at all.
But othersnaturallydisagree. Reggie Middleton is a financial analyst focused on cryptocurrency and runs the decentralized trading platform Veritaseum. A Bitcoin Unlimited fork would be destructive to the economic value of the [Bitcoin] network as a whole, he says, in part because the strength of any payments system hinges on its size.
Middleton is also concerned about Bitcoin Unlimiteds implications for bitcoins governance. Like Ver and most longtime bitcoin supporters, hes a staunch critic of government and corporate power, attracted to bitcoin because it promises to free currency from control by old regimes. But Bitcoin Unlimiteds larger blocks would require more computing power, storage, and network bandwidth to process, which could concentrate mining in fewer hands, making the system both less secure and less democratic.
Once you centralize it, says Middleton, you open it to threats. It would become like the banking system, which is basically greedy middlemen who stand between you and your money. For bitcoin die-hards, there is no greater slur than comparing something to a bank.
For bitcoin die-hards, there is no greater slur than comparing something to a bank.
Ver thinks this position is ridiculous. Bitcoin was once a true grassroots project, with ramshackle servers toddling along in peoples basements and dorm rooms. But the system has already become vastly more power-hungry: Ver points out that a single usable mining server, and its voting power, today costs $1,000 or more. In other words, bitcoin is still a radical political project, but its also big business, and its time to come to terms with that.
Jeff Garzik has a unique perspective on the public bloodletting. Before spending four years as part of the Bitcoin Core team, Garzik was a leader at Red Hat, which helped make the open-source Linux system digestible for corporate users. Someone had to play that insulating role, because it was common for Linuxs democratic community of developers to engage in ideological warfare over lines of code.
But Garzik says that even Linuxs biggest battles cant compare to the hate swirling around bitcoins block-size debate. While Linux fights might have broken out over engineering approaches, and early bitcoin debates revolved around ideology and theory, Garzik thinks something much less abstract is driving bitcoins current unrest: money.
At this point, more than $1.5 billion in venture capital has gone to support blockchain startups, and many have business models that would be affected by how the block-size problem is solved. Blockstream, which employs some Bitcoin Core developers, builds sidechains, the sort of secondary system that would be more in demand if bitcoin itself doesnt start accepting more transactions. On the other hand, theres BitPay, which has sold merchants the idea of bitcoin as a low-fee retail payment system, and for whom the strangled state of the bitcoin blockchain has been a serious headache.
Youre asking developers, in effect, to pick winners and losers in the market, says Garzik.Theres no right answer.
But there could be a wrong answer. A miscalculated change could disrupt bitcoins basic economics, a fine balance of computing costs, coin value, and network demand. And all of those competing blockchains are waiting for a mistake. If bitcoin were to recede, that will be sad for me, says Ver. If theres another iPhone thats better, thats sad for my old iPhone. But it means we get to use a better one. Ver has outlined this endgame scenario on the same portal that he established years ago as a friendly invitation to new bitcoin users. Bitcoin Jesus is now preaching about the looming bitcoin apocalypse.
The viciousness and intractability of the scaling fight could suggest a flaw at the heart of bitcoins core democratic ideals. Maybe, in the end, we really do need authority figures to make big decisionsespecially when theres money on the line. But Charlie Shrem, another early bitcoin entrepreneur who now supports the SegWit solution, focuses on the fact that the software has stood firm amid the chaos. Changes that can hurt the network cant happen easily. Its the same thing with changes that can make the network better. Its what makes the network strong. Its beautiful. His opponent, Ver, sees the same silver lining.
Its not surprising that the two would share a sanguine perspective on the chaos gripping their lifes work. Though nominally antagonists today, Shrem and Ver have a friendship rooted in years in the bitcoin trenchesVers first investment was in Shrems bitcoin payment startup. Shrem says Ver (along with a lot of other people who hate each other on the internet) will attend his upcoming wedding.
In the aftermath of the exchanges March letter, the tension over scaling has continued to ratchet up slowly. New proposals have attempted to break the standoff between Bitcoin Unlimited and SegWit, including one that some say subverts bitcoins basic decision-making process. A version of the SegWit solution was successfully activated on the bitcoin alternative Litecoin, demonstrating that its ready for the big leagues. But still, the deadlock holds, bitcoin is left with the slow and expensive status quo, and neither side is truly happy.
And maybe thats just what democracy looks like.
This article is part of Future Tense, a collaboration among Arizona State University, New America, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, follow us on Twitter and sign up for our weekly newsletter.
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BBC News | US bitcoin conman hit with $12m fine - BBC News BBC News The fraudulent scheme netted the Connecticut conman about $20m, say US prosecutors. Bitcoin Ponzi schemes slammed with $12 million penalty | ZDNet Person behind Bitcoin Mining Scam Faces $12 Million Fine SEC Wins GAW Miners' Bitcoin Ponzi Legal Case, Continues Litigation Against Garza |
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If you're interested in getting invested in the digital currency world, now seems to be as good a time as ever. Bitcoin has seen repeated record-setting price levels, and a host of other digital currencies are becoming increasingly popular around the globe. And yet, there are some reasons why even seasoned investors may be reluctant to get involved in direct investments relating to cryptocurrencies. Fortunately for those people, there is an exchange-traded fund focusing on Bitcoin in particular that can simplify the process. It is called the Bitcoin Investment Trust (GBTC) and it is provided by Grayscale Investments. Here are some of the basic details about the new trust and its relationship to the digital currency itself.
The Bitcoin Investment Trust sported a tremendous 248% increase in the month of May. This far surpasses the gains of 72% overall for the Bitcoin-U.S. dollar currency cross. With that figure in mind, investors may be jumping to get access to GBTC shares. However, there are other factors to consider as well.
First, May's performance seems to be a relative anomaly for the trust. For two of the three months prior to May, Bitcoin performance superseded the trust's performance, which suggests that the two are actually more neck-and-neck than May's figure would suggest. Second, investors looking to buy into GBTC should keep in mind that it is currently trading at more than double the cost of Bitcoin itself even though the underlying asset is 100% Bitcoin Business Insider reports.
Potential investors are likely wondering why GBTC shares can be found at such a high premium over Bitcoin. The issue seems to lie in supply and demand. While Bitcoin demand has skyrocketed, GBTC has kept its shares outstanding close to 1.7 million in the two years that it has existed. In fact, the ETF seems unlikely to change the number of total outstanding shares in the future, according to the company's head of research, Ihor Dusaniwsky. He explains that "with the operational risk of buying and holding actual Bitcoins to support ETF creation very high, and difficult and expensive to insure, it is unlikely that GBTC's outstanding share amount will climb above 1.7 million anytime soon."
It is useful to note that GBTC didn't always seem this expensive in comparison with Bitcoin. Before Bitcoin's price spiked in the past several weeks, the trust traded on an average premium of just 10% above the crypto currency in 2017. The issue seems to have come about when Bitcoin's demand blew up and GBTC's supply did not change. As Bitcoin continues to spread further into the financial world, it will be interesting to see where GBTC's share prices go as well.
GBTC is traded on OTCQX.
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Why Buy This Bitcoin ETF Instead of Actual Bitcoin? | Investopedia - Investopedia
The investment category of cryptocurrencies hit a new milestone on Tuesday, one that would have been unfathomable just a couple of years ago: $100 billion in combined market capitalization.
The break above the 12-digit threshold is largely attributable to bitcoin, which is by far the largest digital currency in the still-nascent category, and which has been on a tear lately.
Bitcoin BTCUSD, +8.61% has more than tripled in 2017, according to crypto pricing site CoinDesk, and on Tuesday it rose more than 7% to $2,879.80. Earlier, it hit a record above $2,900. Those gains have brought its market cap to $46.68 billion, accounting for nearly half of the entire category.
At its current size, bitcoin has surpassed the market capitalization of such major companies as Ford Motor Co. F, -1.16% Deere & Co. DE, -0.22% and Delta Air Lines Inc. DAL, -0.31% It is larger than more than two-thirds of the components of the S&P 500 SPX, -0.28%
The swift rise in bitcoin prices have raised concerns about valuation. On Tuesday, the billionaire Mark Cuban tweeted that bitcoin prices were in a bubble, adding, I just dont know when or how much it corrects. He also called cryptocurrencies more religion than asset.
Read: Heres how blindingly fast bitcoin has been surging
Related: 3 reasons why bitcoins surge may not be a bubble
And dont miss: Bitcoin is up over 400% in the past yearwhats stopping it from going mainstream?
There are more than 800 cryptocurrencies, according to CoinDesk, although most of them are thinly traded and have market capitalizations under $1 million. Only eight cryptocurrencies are worth more than $1 billion.
Besides bitcoin, ethereum is the most widely used product, with a market capitalization of nearly $24 billion. Ethereum has been an even bigger gainer than bitcoin in 2017. It started the year at $7.98 per coin, and is currently trading at $261a rise of nearly 3,200% year-to-date.
Ripplethe third-most valuable on this metric, and which is up more than 25% over the past weekrecently cracked $10 billion in value.
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With bitcoin surge, cryptocurrencies top $100 billion in market capitalization - MarketWatch
MUMBAI: The quest for multi-baggers often leads investors to seemingly obscure stocks that would be the blockbusters of the future. In the past two years, however, money managers may have done better if they had chosen the least likely growth asset the currency.
The once non-descript bitcoin, a crypto currency, has returned more than 10 times since 2015, with the price of the digital instrument hitting a record Rs 225,000 a unit in the domestic spot market last week. Trading in bitcoins is gaining traction, especially among those aged 18-35 years and seeking to harness volatility for extra-ordinary returns.
The increasing awareness of bitcoins worldwide, particularly about its revolutionary technology, has triggered a rally in the bitcoin market, said Sandeep Goenka, cofounder and chief operating officer at Zebpay, an app-based bitcoin exchange. Japan has now added itself to the list of countries that have regulations for bitcoins. Due to these positive factors, bitcoin prices have been showing tremendous strength.
With an expert committee in India now seeking to regulate domestic trading of bitcoins, prices are expected to leapfrog in the next one year. Since April, Japan's legalization of the digital currency has contributed to the rally in bitcoins. After Tokyos move, many vendors have started accepting the virtual currency: Peach Aviation, for instance, is going be the first Japanese airline to accept bitcoins as payment for plane tickets.
Sahil Shah, a final-year BBA student of Nirma University, Ahmedabad, has sold four bitcoins at roughly Rs 2.20 lakh apiece versus Rs 70,000, the average price at which he acquired those.
"This rally was almost a bubble, but it gave a solid profit-booking opportunity for investors who bought bitcoins two - three years ago. I will buy back once prices correct a bit more," said Shah.
It is not necessary to buy one bitcoin. One can even buy a fraction of that. At Zabpay, one can invest with a minimum of Rs 1,000. It is now registering trading volumes of Rs 50 crore per day, which was way below at about Rs 15-20 crore even a year ago.
According to Goenka, Zabpay now holds about 70 per cent market share. Coinsecure and Coinmama are some of the other platforms used to trade in the currency.
Like any other investment, bitcoins are not risk-free. Sharp price swings are routine. After touching the record high of Rs 225,000 a unit, the price plunged to about 160,000 a unit within an hour or two.
"I've held on to my bitcoin portfolio as I am a long-term investor. I expect bitcoin prices to strengthen over a longer time-frame. If more countries legalise crypto currencies, bitcoin prices may appreciate much more than the current (price) levels," said Madhur Todi, who owns seven bitcoins now.
"Betting on bitcoins can be very risky: It's a very volatile asset class. At most, investors can take 1 - 2 per cent of their overall portfolio exposure to bitcoins," said Todi, who runs Mera Money Advisors, an Ahmedabad-based wealth advisory firm.
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Forget U.S. stocks and emerging-market assets, even ignore bitcoin. Those brave enough to invest in the Wild West of tech are the ones making a killing.
While the record-breaking rally in bitcoin has captivated markets, demand for other digital coins is surging as companies raise millions in minutes, or even seconds, from investors wanting in on the next big tech startup. Last week it took 30 seconds for Mozilla co-founder Brendan Eich to issue about $35 million of basic attention token, the unit of exchange in a blockchain-based advertising platform built on top of the companys Brave browser.
QuickTake Bitcoin and the Blockchain
Digital tokens tied to the blockchain platform issued this year have more than doubled in price on average since trading started, according to data compiled by Bloomberg. Tech startups are increasingly selling coins that can be used on their projects instead of resorting to traditional financing methods such as venture capital.
The sector isnt for the fainthearted. The apps and websites behind most of these tokens are still only in development stage. Most are sold for pennies on the dollar and volatility can be extreme. TaaS, a closed-end fund dedicated to blockchain markets, had the coins it sold this year double in price in five weeks, and then fall 35 percent in two days.
But if you can stomach the risk, the rewards have been substantial. Coins from the 15 ICOs this year for which data is available have risen by an average of over 100 percent, while shares sold in initial public offerings in the U.S. this year have gained 13 percent on average since they started trading.
Theres been overwhelming demand for coins,said Ron Quaranta, chairman of the Wall Street Blockchain Alliance. Sure, a lot of it is based on speculation and traders looking to make a quick gain, but theres also a fundamental driver, which is the anticipation that the digital-currency market is maturing.
Read more on how digital coins are letting startups bypass venture capital
Forty-four coins have been issued this year, according toblockchain research website Smith & Crown. Not all trade immediately after the auctions since some have vesting periods. The tokens with the biggest gain, a 500 percent jump since it started trading on March 30, was issued byEdgeless, which is building a decentralized gambling platform. That sale wasnt open to U.S.-based investors since the company isnt licensed to operate in the U.S.
Prediction market platform Gnosis sold the highest valued tokens this year. The GNO token started trading at $52 on May 1 and has more than quadrupled.
Even with growing acceptance of blockchain from companies ranging from Toyota Motor Corp. to JPMorgan Chase & Co., some advocates of the technology say theyre cautious of the digital tokens because of the exuberance sweeping through the cryptocurrency world.
It seems like a fad, and as a professional investor, its not what we do, said David Dunn, president of Kingsbridge Wealth Management, who first bought bitcoin in 2014 and has invested in blockchain-related companies. Id rather invest in the companies using the technology themselves. The speculators might end up being right, and this becomes a solid investment because of the power of the technology, but were not at that stage.
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Token sales like the one for Gnosis, which catapulted the companys market capitalization to over $300 million without it even having a product, or Eichs BAT coin, which was over in seconds, have raised some eyebrows. Still, the token market will probably continue to grow at least in the near future, said Nick Tomaino, principal at San Francisco-based venture-capital firm Runa Capital, who also runs The Control blog, which tracks digital currencies.
More than $100 million of coins has been raised this year, surpassing total sales last year, while total issuance is expected to jump to about $600 million, according to Tomaino.
Theres a lot of hype, and a lot of money being raised because its so easy for anyone to create these coins without having to deal with any third parties, and its so easy for people to buy them, Tomaino said. It cant be stopped.
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Digital Coins Are Making Bitcoin's Rip-Roaring Rally Appear Tame - Bloomberg
McClatchy Washington Bureau | You can't hold a bitcoin, but the web currency's value has skyrocketed. Why? McClatchy Washington Bureau Unlike gold or dollar bills, the digital currency known as bitcoin does not physically exist. There is no there there. Even so, there is excitement and speculation. And a wild rollercoaster ride. The price of bitcoin has more than tripled in the past ... Bitcoin now worth more than gold Be Wary Of This Skyrocketing Bitcoin Fund |
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June 5, 2017, 2:36 AM EDT
The speculative frenzy in bitcoin is spilling over into the Tokyo Stock Exchange. Remixpoint Co., Infoteria Corp. andFisco Ltd., have all seen volatile swings in their share prices after announcing businesses related to digital currencies.
Remixpoint has more than doubled since tying up with Peach Aviation Ltd. to let customers pay for tickets with bitcoin. Infoteria, up 58 percent in the past month, is testing ways to let shareholders vote by proxy using blockchain, bitcoins underlying technology.Fisco, a financial information services provider, began operating a bitcoin exchange last year and is up 26 percent since early May.
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All of these gains coincide with bitcoins rally, with the value of the virtual currency doubling against the U.S. dollar since early May. That has made the stocks of the these small-cap companies an attractive way for speculators to invest in cryptocurrency markets without buying them directly. Thats because investors can make bets via their brokerage accounts instead of taking risks with bitcoin exchanges, according to Naoki Murakami, a well-known day trader in Japan.
From about a month ago when all these virtual currencies started spiking like crazy, we began seeing the so-called stocks of the virtual currency bubble, said Murakami, a frequent speaker at investor conferences. Not everyone is sure they can trust bitcoin exchanges. And some dont have accounts there. Thats why theyre using the stock market to speculate.
Its probably not a coincidence that Japans stock market is being seen as a proxy for bitcoin investments. In April, Prime Minister Shinzo Abes government legalized digital currencies as a form of payment and placed rules around audits and security. That lent credibility to digital currencies, leading to some Japanese companiesseeking partnerships with bitcoin startups.
Remixpoint is the biggest of the bunch, with a market value of 31.3 billion yen ($283 million). Remixpoint was the second-biggest gainer in the TSE Mothers Index over the past month, helping the gauge soar to the highest level in a year. Remixpoint is trading at 514 times earnings, the highest among all Japanese technology companies worth more than 30 billion yen.
Another reason why these stocks can become proxies for bitcoin is due to Japans relatively loose listing laws, some of which require no income and a market value of as little as $10 million before a company can go public. Thats made the Tokyo Stock Exchange home to hundreds of small companies.
Its pure frenzy, Murakami said.
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Bitcoin Mania Infects Japanese Stock Market's Smaller Listings - Bloomberg
TOKYO/SEOUL Long the preserve of geeky enthusiasts, bitcoin is going mainstream in Asia, attracting Mrs Watanabe - the metaphorical Japanese housewife investor - South Korean retirees and thousands of others trying to escape rock-bottom savings rates by investing in the cryptocurrency.
Asia's moms and pops, already regular investors in stock and futures markets, have been dazzled by bitcoin's 100 percent surge so far this year. In comparison, the broader Asian stocks benchmark has gained 17 percent over the same period.
Even after a tumble from last week's record $2,779.08 high, bitcoin rose more than 60 percent in May alone - driven higher in part by investors in Japan and South Korea stepping in as China cooled after a central bank crackdown earlier this year.
(For a graphic on bitcoin economy click tmsnrt.rs/2skLZ3c)
Over the last two weeks, and encouraged by Japan's recognition of bitcoin as legal tender in April, exchanges say interest has jumped from the two countries. Bitcoin trades at a premium in both, due to tough money-laundering rules that make it hard for people to move bitcoin in and out.
"After I first heard about the bitcoin scheme, I was so excited I couldn't sleep. It's like buying a dream," said Mutsuko Higo, a 55-year-old Japanese social insurance and labor consultant who bought around 200,000 yen ($1800) worth of bitcoin in March to supplement her retirement savings.
"Everyone says we can't rely on Japanese pensions anymore," she said. "This worries me, so I started bitcoins."
Asia has proved fertile ground for bitcoin due to the region's thriving retail investment culture, where swapping investment tips is already common. China, Japan and South Korea are home to several of the world's busiest cryptocurrency exchanges, according to a ranking by CoinMarketCap.
"Right now, it's a form of speculation, like stocks," said Park Hyo-jin, a 27-year-old South Korean who owns around 3 million won ($2,700) of bitcoin. "I don't think anybody in South Korea buys bitcoin to use it."
The risks, though, are rising too.
Bitcoin is largely unregulated across Asia, while rules governing bitcoin exchanges can be patchy.
In Hong Kong, bitcoin exchanges operate under money service operator licenses - like money changers - while in South Korea they are regulated similar to online shopping malls, trading physical goods. Often there are no rules on investor protection.
BITCOIN WHEN YOU DIE
Park and Higo were drawn into bitcoin by friends. Others are attracted through seminars, social media groups and blogs penned by amateur investors.
Noboru Hanaki, a 27-year-old Japanese web marketer and bitcoin investor, said his personal finance blog gets around 30,000 page views each month. The most popular post is an explanation of bitcoin, he said, noting that when the bitcoin price surged last month, readership of the article doubled.
Rachel Poole, a Hong Kong-based kindergarten teacher, said she read about bitcoin in the press, and bought five bitcoins in March for around HK$40,000 ($5,100) after studying blogs on the topic. She kept four as an investment and has made HK$12,000 tax-free trading the fifth after classes.
"I wish I'd done it earlier," she said.
Not everyone's making money.
The bitcoin frenzy has spawned scams, with police in South Korea last month uncovering a $55 million cryptocurrency pyramid scheme that sucked in thousands of homemakers, workers and self-employed businessmen seduced by slick marketing and promises of wealth.
Seminars in Tokyo, Seoul and Hong Kong promote similar multi-level marketing schemes that require investors to pay an upfront membership fee of as much as $9,000. Members are encouraged to promote the cryptocurrency and bring in new members in return for some bitcoins and other benefits.
One such Tokyo scheme offered members-only shopping websites that accept bitcoin, 24-hour assistance for car and computer problems, and bitcoin-based gifts when a member gets married, has a baby - or even dies, according to marketing materials seen by Reuters.
Leonhard Weese, president of the Bitcoin Association of Hong Kong and a bitcoin investor, warned amateur investors against speculating in the digital currency.
"Trading carries huge risk: there is no investor protection and plenty of market manipulation and insider trading. Some of the exchanges cannot be trusted in my opinion."
Some larger exchanges have voluntarily adopted security measures and compensation guarantees, according to their websites, although there are dozens of smaller platforms operating more or less unchecked.
In South Korea, the Financial Services Commission (FSC) has set up a task force to explore regulating cryptocurrencies, but it has not set a timeline for publishing its conclusions, an official there said.
In Japan - where memories are still fresh of the spectacular 2014 collapse of Mt. Gox, the world's biggest bitcoin exchange at the time - the Financial Services Agency (FSA) said it supervises bitcoin exchanges, but not traders or investors.
"The government is not guaranteeing the value of cryptocurrencies. We are asking for bitcoin exchanges to fully explain the risk of sharp price moves," an FSA official said.
Some professional investors say bitcoin can be a useful hedge to help diversify a portfolio, but investors should be cautious.
"This is an extremely volatile and innovative asset class," said Pietro Ventani, managing director of APP Advisers, an asset allocation strategy firm.
(Reporting by Minami Funakoshi in Tokyo and Joyce Lee in Seoul, with additional reporting by Michelle Price in Hong Kong and Yoshiyuki Osada, Takahiko Wada and Hideyuki Sano in Tokyo; Writing by Michelle Price; Editing by Clara Ferreira-Marques and Ian Geoghegan)
TOKYO Japan's Mizuho Financial Group will start a venture next month to create new businesses using "fintech," an executive said, joining a global race in financial technology that threatens to unsettle traditional players.
NEW YORK Kik Interactive, which created the chat platform Kik, said on Thursday it was launching a crypto-currency or token called Kin that would enable customers to use a whole range of digital services.
NEW YORK Financial and technology companies led by Bank of America Corp, SBI Holdings Inc, HSBC Holdings Plc, Intel Corp and Temasek Holdings have invested $107 million in R3 CEV, a startup which runs a big bank consortium seeking to develop blockchain technology, it said on Tuesday.
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Fretting over savings, Mrs Watanabe turns to bitcoin - Reuters
Bitcoin price is steadily climbing in its ascending channel formation, possibly even looking to make an upside breakout and steeper rally.
Bitcoin Price Key Highlights
Bitcoin price is steadily climbing in its ascending channel formation, possibly even looking to make an upside breakout and steeper rally.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. The gap between the moving averages is widening to reflect strengthening buying pressure.
Also, the 100 SMA recently held as dynamic support while the 200 SMA coincides with the channel bottom near 2400, adding to its strength as a potential floor.
Stochastic is pointing up to signal that bulls are on top of their game. Similarly RSI is on the move up so bitcoin price might follow suit. However, stochastic is already nearing the overbought zone to indicate rally exhaustion, possibly drawing sellers to the mix and leading to a larger correction from the uptrend.
Market Factors
Dollar weakness was in play on Friday after the NFP release and bitcoin price was able to take advantage. The NFP report printed a smaller than expected rise in hiring and a downgrade in the previous release, leading traders to doubt that a June rate hike is underway.
Keep in mind that the Fed has been confident about employment prospects so this setback could lead them to reevaluate their stance. Still, the unemployment rate improved to 4.3% while average earnings came in line with estimates of a 0.2% uptick.
Political uncertainty surrounding the upcoming UK snap elections and the recent terror attacks in London are also shoring up demand for the cryptocurrency as investors seek higher returns and diversify their holdings out of traditional financial markets.
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The block size debate has gotten to a point that some bitcoin observers think it could doom bitcoin. Bitcoin has defied all the bitcoin naysayers and prospered, recently setting record market capitalization. Will internal strife prove its ultimate undoing?
A recent proposal designed to appease both sides in the bitcoin scalability debate may be doomed because of the way in which it became public. Laura Shin, a Forbes columnist, reported on the Extension Blocks proposal and its role the increasingly contentious conflict over changing the bitcoin block size.
The Extension Blocks solution was made public Monday without first being presented to the bitcoin developer community. Reception to the proposal was mixed on Reddit and Twitter.
Emin Gun Sirer, co-director of the Initiative for Cryptocurrencies and Smart Contracts and a Cornell associate professor, said the proposal is technically clever and politically brilliant.
But he expected opposition to the solution will come from a non-technical cause the effort to sidestep protocol and engage the media before the development community.
Block size debate observers consider it to be about the size of blocks; the number of transactions that can be processed in a specific time period. Shin, however, claims the underlying goal of the debate is the control of bitcoin.
The existing bitcoin network limits the amount of transaction blocks that get added to the ledger to 1 MB. The miners that add the transactions want to raise that limit.
The developers say increasing the block size will compromise bitcoins decentralization by putting it under the control of concentrated powers, be it individuals, institutions, governments or other entities. Increasing the block size limit will require a hard fork, which could split the network into two blockchains and possibly compromise bitcoins value.
The developers support Segregated Witness (SegWit), which would allow more transactions per block by making the blocks more efficient. This solution would not require a hard fork.
Andrew Lee, CEO of Purse and a supporter of the extension block proposal, said the extension block addresses both camps concerns. Extension blocks allow larger blocks and also deploys SegWit and doesnt require a hard fork.
Also read: Op-Ed: A new blocksize proposal goes nowhere
Extension blocks process transactions outside of the 1MB block but tie them to blocks on the bitcoin blockchain. Stephen Pair, CEO of BitPay, said the extension block is a good idea since it improves the networks capabilities and allows people to experiment. Eric Lombrozo of Bitcoin Core opposed the proposal since it is untested.
SegWit, on the other hand, has been released but has not been adopted by enough computers to make it active.
Samson Mow, formerly with BTCC, said the new proposal goes outside the norm of how open source software is developed. He said proposal supporters are falsely stating that everyone supports it and that it defies bitcoins principles of decentralization, openness, and transparency.
Mow said the way extension blocks were proposed has a political bent to it and could pressure developers to support it by making them think the amount of support is greater than it really is.
Shin noted the extension block proposal could already be compromised by a lack of community trust, despite assumptions about bitcoins trustless nature.
BitPays Pair was skeptical when asked if extension blocks will end the two-year scalability debate.
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Extension Block Proposal Stumbles In Attempt to End Bitcoin Block ... - CryptoCoinsNews
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There seems to be a lot of controversy surrounding Bitcoins legality in India. The government and ministers are cautioning the users repeatedly gainst the risk involved with the usage of this digital currency.
The minister of state for finance, Arjun Ram Meghwal, last week reiterated concerns against the use of digital currencies in India.
"The absence of counter parties in usage of [virtual currencies] including bitcoins, for illicit and illegal activities in anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws," he said in a written reply to the Rajya Sabha.
Despite all the warnings, Bitcoin startups of India remain confident and feel largely insulated by the consequences of the risk involved with the cryptocurrency. Bitcoin startups such as SearchTrade, Zebpay, Unocoin and Coinsecure have taken a step forward to form the Digital Asset and Blockchain Foundation of India (DABFI) for the orderly and transparent growth of the virtual currency market.
Understand Legal And Value Discovery Process for Bitcoin:
Vikas Gupta, CEO, SearchTrade feels Bitcoins are a risky investment not withstandinggovernment opinion or policies around it.
One must understand both legal as well as value discovery process before jumping into investing in them. The government has not explicitly said it is illegal; my understanding is they insist it is illegal to indulge in illegal activities with them, he explained.
Talking about the self regulatory body formed by the Bitcoin start-ups, he said, We are creating a self-regulatory framework due to lack of defined policies in the space to protect both consumers and businesses involved in the space. For e.g., we have made it mandatory for our members to implement KYC, anti-money-laundering and suspicious trade reporting in their day to day operations. We are working on many such initiatives to help the budding ecosystem.
In addition, at DABFI Vikas along with other members are engaging with various government departments to help them better understand the technology and frame policies for the future.
Bitcoin Investment Faces Both Technical And Legal Risks:
Another bitcoin exchange company, Zebpay buys and sells bitcoins in India.
Sandeep Goenka, COO and Co-founder, ZebPay believes that investing in bitcoin is high reward, high risk.
Bitcoin has been the best performing currency for a year since its inception except 2014. However, the investment faces both technical and legal risks. Hence even if you consider it, it should be a very small part of your portfolio, he said.
According to Sandeep, bitcoin is legal under all existing laws. If it is banned in future, his company will stop operations. However, he added that it needs to be understood that the ban won't stop cryptocurrencies. It'll only stop its legitimate use.
Referring to the Indian governments strong stance towards the bitcoin usage, he said They have genuine concerns like for any new technology, whether its a taxi hailing app, drones, health tech or cryptocurrencies. However, legitimate exchanges give them radar to the industry. If they ban us, international apps will continue to serve the underground market. All this will achieve is stopping legitimate use and Indian companies.
Bitcoin Will Always Face Legality Issues:
According to Mohit Kalra, CEO and Founder ofDelhi-based bitcoin startup Coinsecure,something so decentralized and disruptive like bitcoin will always face issues regarding legality. Even for semi-decentralised cab systems like Uber and Ola Cabs, it took a lot of years for the regulators to come out with proper regulations. This delay definitely not means it was illegal to operate such services.
We are seeing a similar trend with bitcoin, there are different opinions currently. Making bitcoin illegal will force exchanges like ours to shut down, thus promoting users to trade in cash illegal market. Doing so will be the complete opposite and against to what government expected after demonetisation, he said.
While theres global uncertainty over the legal status of bitcoin in India, Mohit further explained that a ban on something so decentralized will only force all the users to trade illegally. It will only result in government not getting any service tax from the companies or income tax from the users on what they earn from trading or mining.
A self confessed Bollywood Lover, Travel junkie and Food Evangelist.I like travelling and I believe it is very important to take ones mind off the daily monotony .
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Bitcoins Startups Fear No Ban in India, Say Technology Will Make Inroads - Entrepreneur
A new study by the UCL Centre for Blockchain Technologies reveals that 43% of the transactions are still not included in the Blockchain after 1h from the first time they were seen in the network and 20% of the transactions are still not included in the Blockchain after 30 days, revealing therefore great inefficiency in the Bitcoin system.
The bitcoin network was studied over a period of three months where some 12,000 unique nodes were found to be connected with confirmation times less inefficient for large value transactions. The study says:
In this case, we note that the process is still rather slow but most of the value is included in the Blockchain within 3h (93%) and after 30 days only 0:1% of value is left to be included.
The study makes a number of interesting claims. They say, for example, that nearly 200,000 blocks were received during a one week period when only around 2,000 blocks were real or relevant. Giuseppe Pappalardo, a Research Assistant at UCL and one of the papers author, explained this discrepancy to CCN as follows:
When a node receives a block it has to verify all transactions included in the block and the whole block itself. If both transactions and the block are valid, the block is announced to the nodes peers using the inv message. So when a node send to us an INV message related to a block/transactions it should imply that the block passed verification.
The massive presence of dated echo block sent by a large group of nodes can be due to the fact that not all nodes maintain a full copy of the blockchain and therefore are unable to verify blocks. Another scenario could be that these nodes are not performing any verification at all.
Without proper verification, old blocks keep [being] broadcasted by peers in a loop.
That appears to be a clear inefficiency as many resources are being used for no good reason. Regarding transactions themselves, its not clear whether the amount of fee paid and its role in transaction inclusion was studied, with the authors instead only differentiation between small value and large value transactions, leading to an interesting statement:
2 million bitcoins waiting to move image from tradeblock
The Bitcoin system fails in taking accurate record of the transactions with some of them taking months before being recorded in the Blockchain. We note that this inaccurate recording does not seem to be caused by the fact that block size is limited to 1MB and only few thousands transaction can be included into a block. It seems indeed that the network is not saturated yet, with average block size 0.8MB, with only 3% of blocks exceeding 0.99MB band and even with some blocks without transactions.
The study was undertaken around May last year just before blocks became full with Blockchain.info reporting that the current average blocksize over the past 24 hours is 0.96MB. Since last year, transaction backlocks have become far more common, with more than 2 million bitcoins, worth around $2.5 billion, currently waiting to move.
However, the study does point out that regardless of the blocksize there remains no mechanisms that ensures that all transactions are actually processed, as miners are free to choose what transaction, if any, to include in their block.
Nakamoto did include a mechanism, but its not enforceable as its not at a protocol layer. That is whats called first-seen. Nodes/miners are meant to process the first seen transaction, so forming a queue through this method, but it breaks down with full blocks. Without full blocks it remains unenforceable, but since its a logical way of processing transactions most miners would probably apply it as they did prior to full blocks.
The added benefit of first seen is that double spends are very difficult although possible through a miner who does not use first-seen even when the transaction has no confirmation. Making bitcoins transactions as good as instant in most cases, especially in physical settings.
Its not clear whether the authors are aware of the first seen mechanism which has now largely been superseded by a fee-paying prioritization method. Pappalardo says that further investigation is needed to ascertain why some transactions are not included, before adding:
What we suggest is that miners have no incentives to include all transactions and therefore some are missed and after a while becomes increasingly unlikely that a miner willingly include old transactions.
Pappalardo further said that despite the intentionally-provocative negative view on the bitcoin network efficiency, at the UCL Centre for Blockchain Technologies we strongly believe in the great potential of blockchain and its peer consensus mechanism. With this paper we call for a debate on the right system of incentives to make a peer-to-peer blockchain system efficient in recording transactions correctly and timely.
Asked what system of incentives might improve efficiency, Pappalardo said that without any incentive for proper processing and timely recording of transactions it is unlikely the system will spontaneously invest efforts to become more efficient.
This topic has been a matter of public debate, for now, two years with some suggesting the base layer should be kept inefficient through enforcing an upper limit of 1MB blocks so that everyone uses the Lightning Network, while others arguing for the reinstatement of the first seen mechanism through lifting the 1MB limit.
Those arguing for a retention of the inefficiency have gained the upper hand by blocking any changes to the protocol, including the latest proposal of extension blocks. The end result is that now almost half of bitcoin transactions need to wait for more than an hour with independent studies proclaiming bitcoins payment network is inefficient.
Whether such inefficiency will be addressed in bitcoin remains to be seen, but scientific and impartial independent studies are always a welcomed addition to the never ending blocksize debate.
Featured image from Shutterstock.
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Study: 43% of Bitcoin Transactions Aren't Processed after First Hour - CryptoCoinsNews
The Digital Asset and Blockchain Foundation of India aims to create awarenessabout the benefits and risks of cryptocurrencies, liaise with regulators and get clarity on taxation, attract investment and set up incubators to promote startups.
Four years after it first warned the users of virtual currencies (VCs), including Bitcoin, in 2013 of the potential financial, operational, legal, and security-related risks that they were exposing themselves to, the Reserve Bank of India(RBI) recently again expressed concern over the risk-prone Bitcoin players, who have no authorisation to deal with Bitcoin.
But these warnings seem to have had no effect on the Bitcoin and cryptocurrency players, who that have now gone a step further and set upthe Digital Asset and Blockchain Foundation of India (DABFI) as a kind of self-regulatory body to lay down rules and regimes for the trading of Bitcoins and other blockchain-based digital assets.
The DABFI initiative is being spearheaded by Bitcoin startups such as SearchTrade, Zebpay, Unocoin, and Coinsecure, and follows from the need to ensure an orderly and transparent growth of the virtual currency market. The foundationis mandated to standardise KYC (Know Your Customer), AML (Anti-Money Laundering), and STR (Suspicious Transaction Report) norms for the member companies and create awareness about the benefits and risks of crypto-currency.
In addition, DABFI will alsoliaise with regulators and get clarity on taxation, attract investment and set up incubators to promote startups, build global relations and actively engage with the international community, and create a public website and regularly print reports on and around Bitcoin and the blockchain.
The foundation is currently working on creating awareness among investors and firms against such schemes and programmes that lead to problematic transactions and mistrust around cryptocurrencies. Vishal Gupta, CEO, Searchtrade and founding member of DABFI, says,
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.
Vishal says he appreciates RBIs warning in the light of many multi-level marketing (MLM) and network marketing companies offering cloud mining and alt coin, and promising unreal returns to investors. These companies, according to him, are trying to ride the popularity of Bitcoin and trapping uninformed investors with their schemes.
According to Bitcoin startups, since there is no formal recognition of Bitcoin or cryptocurrency, raising capital from accredited investors becomes a major challenge for them. Besides, there is little clarity about the taxation that is applicable to various types of Bitcoin transactions.
The RBI, on its part, maintains that it has not given any licenceor authorisation to any entityor company to deal with Bitcoin or any virtual currency, and as a result, any user, holder, investor, or trader dealing with virtual currencies will be doing so at their own risk.
In response to RBI's stance, Vishal says there is no real need to apply for any licence to deal in Bitcoin, since it has not been definitively identified as a currency yet. So, most businesses treat it as commodity trading, which does not require any sort of licensing.
Bitcoin players believe that self-regulation has worked for various industries that are not covered by any regulation. The Code for Self-Regulation in Advertising, for instance, adopted by the Advertising Standards Council of India (ASCI) has been widely accepted by regulators (through incorporation in the relevant rules), courts, and industry alike. DABFI has engaged an international law firm, Nishith Desai Associates, to assist it in developing norms for self-regulation.
Self-regulation does not work outside the framework of existing laws, but rather tries to create best practices for participating members to comply with established norms. Since blockchain is a relatively new technology, one that is still evolving, self-regulation helps, since experts who are in the know of development and working in the industry can keep pace with rapid developments and study compliances with the law on a day-to-day basis, says Vishal.
He emphasises that there are around 400,000 to 500,000 people who have bought or sold Bitcoin, and that the total market size is approximately Rs 2,000 crore a year in India. Most investors primarily use it as an investment rather than as a currency. Think of it as digital gold rather than currency, says Vishal. According to Mohit Kalra, CEO and Founder, Coinsecure,
"Regulating something so decentralised as Bitcoin is not an easy task. By the time authorities figure it out, all DABFI members will be working on self-regulation to ease out complications for the authorities and the community in the future.
Referring to the RBI caution, Sandeep Goenka, Co-founder of Zebpay, says, "The cautionary note addressed to the regular public is correct in its intention. Cryptocurrencies do face technical risks. However, the cautionary note should not be used against companies who are trying to do legitimate business and self-regulating themselves.
The Digital Asset and Blockchain Foundation of India is an association of people who are keen to propagate the use of digital assets like Bitcoin and Ethereum within India. It is engaged in educating people about the risk associated withinvesting and trading in cryptocurrencies. It also creates and propagates practices Bitcoin businesses must adhere to based on consultations within the industry, as well as with regulators and various other stakeholders. in addition, DABFI has organised various events, bringing in Indian and overseas experts to share their experiences in Bitcoin so as to help people gain a better understanding of the subject.
Cryptocurrencies and blockchain are poised to have a profound impact on both Indian as well as global economic landscape. Beyond currency, blockchain development is now moving into the space of decentralised contract and record management. This has huge implications for transparent governance and land record management, says Vishal.
Website:DABFI
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Ive been wrong about my timing of the silver and gold trade twice now. Once to my followers in Momentum Trader and another time in a much more public way, on Bloomberg the end of last year. My fundamental investment thesis surrounding gold hasnt been wrong just my timing. And now, with gold prices bouncing off $1,200 and last weeks Bitcoin debacle Im taking another stab at it.
The Bitcoin debacle Im referring to is last weeks decision by the SEC to reject the Winklevoss Twins proposal for a Bitcoin ETF. An ETF would have helped to legitimize the cryptocurrency and expose it to an entire new market of potential investors. The SECs decision was based on the unregulated nature of the Bitcoin market itself. With no way of overseeing the underlying investment, there was no way the SEC could give it a stamp of approval.
You could argue that Bitcoin and gold are both alternatives to global fiat currencies. Neither has a central bank which governs them nor do they pay interest. They are both a store of value and can be held anonymously. Gold and silver have a tendency to track with each other so Im including it when I look for stock ideas.
Of course theres one giant difference between the two. Gold has been a historic store of value for ages and something you can physically possess. Bitcoin is a digital currency that was created from nothing a few years ago. There is still a huge amount of skepticism surrounding Bitcoin and other cryptocurrencies. A rash of high profile hacks, essentially digital bank robberies, have loomed like a cloud over Bitcoin for years. This ETF would have been something like a Bitcoin coming out party.
However, that was not the case and Bitcoins value plunged in Friday trading. Nearly simultaneous there was a huge rally in gold prices with the metal bouncing from just under $1,200 an ounce, an obvious psychological support level. Gold still does have an inverse relationship with yields. As interest rates rise you tend to see pressure on gold prices. We all know the Fed is going to hike rates next week. That is a huge negative on gold pricing. But if the metal can rally even in the face of that hike, then there could be overpowering fundamentals at play.
One way to play a potential continuation of silver and golds move higher is to look at the silver and gold miners. A lot of these companies got lean and mean in order to survive the plummet in prices and have emerged with much stronger balance sheets. They have found ways to minimize their acquisition costs and streamline their mining process. Ive put together a list here of gold stocks that are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks for you to investigate a little further.
Alamos Gold (AGI)
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Alamos Gold Inc., together with its subsidiaries, engages in the acquisition, exploration, development, and extraction of gold deposits in North America. It also explores for silver and precious metals. The company holds interests in the Young-Davidson mine, which includes contiguous mineral leases and claims totaling 11,000 acres located in Northern Ontario, Canada; the Mulatos mine located within the Salamandra Concessions in the Sierra Madre Occidental mountain range in the east-central portion of the State of Sonora, Mexico; and the El Chanate mine that comprises 22 mineral concessions covering 4,618 hectares situated in the State of Sonora, Mexico. It also holds interests in a portfolio of development stage projects in Mexico, Turkey, Canada, and the United States.
Avino Silver (ASM)
Avino Silver & Gold Mines Ltd. engages in the production and sale of silver, gold, and copper bulk concentrates; and the exploration, evaluation, and acquisition of mineral properties. The company owns 42 mineral claims and leases 4 mineral claims in the state of Durango, Mexico. It also holds 100% interests in the Bralorne mine located in the Lillooet mining division, British Columbia, Canada; and the Eagle property located in the Mayo mining division of Yukon, Canada.
Fortuna Silver (FSM)
Fortuna Silver Mines Inc. engages in the exploration, extraction, and processing of mineral properties in Latin America. The company explores for silver, gold, lead, and zinc deposits. It holds interests in the Caylloma mine located in the Arequipa Department in southern Peru; and the San Jose mine located in the State of Oaxaca in southern Mexico.
Great Panther Silver (GPL)
Great Panther Silver Limited, a silver mining and exploration company, engages in the mining of mineral properties in Mexico. It explores for silver, gold, lead, and zinc. The company holds interests in the Topia Mine and Guanajuato Mine Complex properties. It also holds mineral property interests in the exploration stage, such as the El Horcon and Santa Rosa projects located in Mexico, and Coricancha Mine Complex located in the Central Andes of Peru.
Bottom Line
I think Bitcoin blowing up here could benefit gold and silver over the short run. That being said, a great way to play the rise in these metals could be to look at the silver and gold miners. This is a short list to start researching the best one to buy.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Great Panther Silver Limited (GPL): Free Stock Analysis Report Fortuna Silver Mines Inc. (FSM): Free Stock Analysis Report Avino Silver (ASM): Free Stock Analysis Report Alamos Gold Inc. (AGI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Moreover, people need to keep in mind not every altcoin is a bitcoin competitor.
No one can deny the cryptocurrency is thriving right now. Some people want to see more money flow to bitcoin and other currencies at a quicker pace, though. One interesting trend is how bitcoins percentage of the total cryptocurrency market cap is going downhill. Right now, that percentage sits close to 81%, whereas it used to be over 95% in January of 2014.
For the longest time, bitcoin has been the dominant cryptocurrency. That is only normal, as it is the only one to gain some market traction. However, several altcoins have proven to be a favorite among speculators and traders as well. Albeit very few of these currencies have use cases, they are perfect vehicles for value speculation. As a result, some money is flowing from bitcoin into the altcoin sector on a regular basis.
This trend is not alarmed by any means. In fact, diversification of a cryptocurrency portfolio is a good thing. While bitcoin still represents the vast majority of total market capitalization of all cryptocurrencies, its share is dropped. In fact, it has been dropping for quite some time now. Back in January of 2014, bitcoin represented 96% of the total cryptocurrency market cap. Fast forward that day, and that number has shrunk to just 84%. Not a big change according to some people, yet it goes to show something is changing behind the scenes.
Looking at the charts, bitcoin has gone through this cycle before. Its market cap percentage dropped below 80% in January of 2015, June of 2016 and Late 2016 as well. Bitcoin rebounds successfully every time, though, and it is expected this pattern will repeat itself once again. After all, there is no reason to ditch bitcoin holdings In favor of any altcoin right now, even though some investments may look appealing.
One contributing factor to the demise of bitcoin is the high transaction fee problem. With fees increasing rapidly, altcoins are becoming more popular due to lower costs. Then again, none of these networks have been tested to handle the transaction volume bitcoin processes every day. Until that happens, it is impossible to tell which currency can keep the costs down in the end. Reducing bitcoins fees would be a good start, though, that much is certain.
Moreover, people need to keep in mind not every altcoin is a bitcoin competitor. Ethereum, for example, is not positioned to be a currency like bitcoin. Neither is Ripple, as it is a competing technology that appeals to banks. Dash and Monero can compete with bitcoin, although the anonymity features may put off some people. Only time will tell how these percentages evolve over the next few months, though.
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Bitcoin's Market Cap Percentage Continues To Shrink Due To Mounting Transaction Fees - newsBTC
Prosecutors in Norway are demanding three darknet drug dealers to pay the penalty in Bitcoin. Read more...
Bitcoin has been portrayed as the most favored currency among the criminal kind. Thanks to increased usage of the likes of Bitcoin among the darknet marketplaces. However, the pseudonymous nature of Bitcoin leads to criminals getting caught on a regular basis. But usually, those who face the trial usually end up having their cryptocurrencies, devices confiscated, sentenced to jail time with or without a monetary penalty slapped on them.
The penalties paid by the dark net drug or weapons dealer caught in the act is usually in the form of fiat currency, but not in Norway. Recently, reports have emerged that the Norwegian prosecutors are demanding three convicts, charged with dealing drugs on dark web marketplaces, including the Silk Road to repay the profits in Bitcoin. If the court does allow the prosecutors to have it their way, then the dealers will be forced to pay about 120 bitcoins, which is worth around $140,000. But it doesnt end here. They are also demanding 3.1 million in the countrys native fiat currency, Norwegian Kroner as well.
The case dates back to the Silk Road days, and the three men were arrested way back in June 2015 for running an online drug distribution ring. The arrests were the result of a 2-year long investigation by Norways law enforcement authorities along with other international investigators. The arrests which took place in Oslo, Norway, also resulted in the seizure of a considerable amount of narcotics, computers and even an indoor marijuana farm.
News articles on media outlets state the prosecution saying that they have enough evidence for the sale in Bitcoins to convict the drug-dealing trio. However, the demand for profit repayment in Bitcoin is heard for the first time in the Norwegian judicial system. The demand made by prosecutors could soon set a precedent for other courts within and beyond the region to adopt a similar practice.
The governments interest in seeking Bitcoin payment, which is not even a recognized currency in Norway also sets a milestone in Bitcoins timeline, pushing it one step closer to recognition as a mainstream currency.
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Norway Asks Online Drug Dealers to Pay up, in Bitcoin - newsBTC
Willy Woo is an entrepreneur, angel investor, derivatives trader and cryptocurrency enthusiast.
In this guest piece, Woo discusses the recent run-up in bitcoin price, and the methods he uses to determine if and when bitcoin is overvalued.
Simply put, Google Trends is a great way to track the growth of active bitcoin users.
The search 'BTC USD' serves as a proxy for the engagement of active bitcoin users as they check the daily price. In the chart above, the baseline denotes the exponential growth of active users, while the height above the line illustrates their engagement levels.
When engagement levels run high, bitcoin users are in party mode, checking the price daily of their precious coin. If engagement levels are too high, that's when we are in a price bubble, and it's a good time to sell.
Here's that graph again with the 'bubble zone' drawn:
Conversely, when engagement is at alow (marked with green dots), this is a good time to buy. Put together, Google Trends is a pretty reliable buy and sell indicator.
So, what does this say about the recent run-up in price?
Here,we can see bitcoin is not in a bubble, and that there is likely still plenty of room for our current bull run to continue.
This piece is not intended to provide, and should not be taken as, investment advice.
Images via Willy Woo for CoinDesk; Soap bubble via Shutterstock
Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.
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Using Google Trends to Detect Bitcoin Price Bubbles - CoinDesk
Wall Street Journal (subscription) (blog) | Let's Be Real: Bitcoin is a Useless Investment Wall Street Journal (subscription) (blog) The Winklevoss twins are an unlikely source of philosophical musings about the nature of money. But the rejection by U.S. regulators of their plan for an exchange-traded product holding bitcoin is a good time to ask why bitcoin might have any value ... |
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Let's Be Real: Bitcoin is a Useless Investment - Wall Street Journal (subscription) (blog)