Daily Archives: September 8, 2018

Survey Reveals a Majority of Investors Are to Increase Their Crypto Holdings

A survey published by investment platform SharesPost has revealed that a majority of both consumers and accredited investors are planning to invest further in cryptocurrencies in the next twelve months.

The cryptocurrency hype appears to have been waning since the enduring bear market came into effect after the red-hot 2017 market highs. The primary discussions rapidly moved from digital assets to blockchain technology, however, this latest survey from SharesPost suggests that there is still faith in cryptocurrencies.

Positive Sentiments

The mid-year survey received 2,490 responses from consumers and 521 from “individual accredited and institutional investors”. In a display of increased interest, the report notes that the first survey conducted in early 2018 had 2,352 consumer participants and 106 from investors.

The study showed that a majority of investors (59%) and consumers (72%) planned to increase their digital asset holdings over the next year. 57 percent of investors and 66 percent of consumers are expecting crypto-values to grow over the next year.

Unsurprisingly, Bitcoin came out on top as the most owned cryptocurrency with Ethereum, Ripple, and Litecoin following behind, though they were favorable due to their long-term potential.

In contrast, a recent survey reports that gauged high awareness and low adoption rates of Bitcoin in the United States; the SharesPost survey found that Bitcoin is increasing in popularity, up to 78% from 48%.

In Business

On the business side of things, blockchain technology is finding footing in companies, as the report writes: “Growing number of companies are implementing Blockchain technology. 32 percent of investors and 49 percent of consumers say employers are planning to roll out Blockchain in the near future.”

In late August, Deloitte published the “2018 Global Blockchain Survey”, where it polled 1,053 companies from seven countries: Germany, China, Mexico, Canada, the United States, and the United Kingdom.

These results found that 84% of these businesses believe that mainstream adoption of blockchain is a “matter of time”. For businesses, the most popular current use case of the technology are supply chain solutions (53%).

Mass-Adoption

The SharesPost report contrasts the Deloitte survey. Investors have lowered their expectations for crypto-mass adoption in 2020 down to 27% from the earlier 51%. Consumers report a drop but it’s a smaller decline which now sits at 37% from 42%. The decline in confidence could be attributed to the 50% of participants who are primarily concerned with market volatility, and 37% said security was their big issue.

Surveys in all shapes and sizes have been making the news with their numbers this year as governments, industries, and independent entities attempt to gauge the crypto or blockchain mood. Collectively, they offer a comprehensive insight into the sentiments coming from certain demographics, as standalone reports. However, they contrast massively due to their sample size and geographical location.

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Trader Triggers Emergency Mode at Exchange With 4.16 Million BTC Futures Position

The world’s second largest exchange Hong Kong-based OKEx, went into emergency mode in late July when a trader took up a 4.16 million Bitcoin futures position listed on the exchange.

The position, worth $416 million, triggered the exchange’s failsafe risk management system forcing futures traders to give up about 18 percent of their profits.

OKEx’s “socialized clawback mechanism,” was called on, which takes a percentage of profit from other short position traders to cover any financial shortfall. This procedure happens when an exchange’s insurance fund is not enough to cover margin call losses.

The client refused to liquidate part of his long position order when approached by the exchange forcing OKEx to freeze his account to prevent further problems.

This incident was seen by the industry as an example of how further regulation is still needed in order to offer a heightened level of protection to exchanges; such as in conventional stock exchanges where brokerages act as a buffer for ensuring clients have sufficient margin deposits and risk management in place on margin calls. Normally exchanges allow their clients to leverage their positions by as much as 20 times.

Soon after the incident, the subsequent drop in the Bitcoin price forced the exchange to liquidate the clients’ account as the required maintenance margin ratio wasn’t sufficient. The shortfall was 1,200 Bitcoin then valued at $9 million, forcing OKEx to add 2,500 of exchange funds into the insurance fund to limit the clawback.

OKEx released a statement explaining that a very large trade occurred which couldn’t be supported:

“An enormous long position in BTC0928 futures contract was force-liquidated at 20:17:14 July 31, 2018 (Hong Kong Time, UTC+8). Due to the sheer size of the order, our risk management system may be triggered to activate the societal loss risk management mechanism.”

Questions have been asked as to how the company’s risk management system allowed such a large trade in the first place, only triggering the system after the trade had been made.

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Asia is Buoyant, New Crypto Exchanges Set for Hong Kong, Korea, and Indonesia

While 160 crypto exchanges wait to enter the Japanese market, elsewhere, the market is turning more buoyant, as Hong Kong, Korea, and Indonesia are poised to become home to new exchanges. Bitone Trade HK, Huobi – Indonesia, and South Korean Probit have all announced that they are opening exchanges.

Hong Kong is particularly buoyant in the blockchain industry at the moment and is feeling the pinch in the sector with a lack of qualified professionals to fill positions. A “talent list” has been issued by The Government of the Hong Kong Special Administrative Region in which it states that it needs “quality people from around the world in a more effective and focused manner to support Hong Kong’s development as a high value-added and diversified economy”. Among the 11 professions on the new list are those with DLT skills.

The latest exchange, Bitone Trade HK will support 30 cryptocurrencies with plans to eventually list more than 100 coins. The company commented:

“Our platform is launched in Hong Kong which is Asia’s international financial center and we provide customers with stable and secure services. Mainly for the Asian market, our goal is to achieve a monthly transaction volume of US$5 billion”

Indonesia may not be one of the markets that spring to mind when the word cryptocurrency drops into a conversation, but the industry is beginning to express itself in South East Asia and forging its own way. The world’s fourth most populous nation has just launched its first formal blockchain association — Asosiasi Blockchain Indonesia (ABI), boosting hopes that the Southeast Asian country may yet embrace blockchain technology.

Huobi Indonesia built on the Huobi Cloud platform will list 123 coins on its new exchange. Currently, the platform lists three base cryptocurrencies: USDT, BTC, and ETH.

South Korea and Japan are considered the crypto powerhouses in the region and never run out of crypto news. Its latest exchange, soon to be launched Probit will list 157 currencies and plans to support eight languages on the platform. The bonus for users is the platform’s heightened levels of security, ensuring that more than 95% of digital assets are stored in a cold wallet supported by hardware keys and software double authentication. The company assures its clients that their “goal is to provide a virtual currency trading platform with the highest level of security.”

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Coinbase CEO: Crypto-Space Population Will Grow to 1 Billion in Next 5 Years

Brian Armstrong, crypto exchange giant Coinbase’s CEO, has suggested that the number of people in the cryptocurrency ecosystem will swell to 1 billion over the next five years.

In a recent interview, Armstrong sees the current number of 40 million making such a substantial growth due to the continued development of tokens by commercial enterprises and even charities. He suggested:

“It makes sense that any company out there who has a cap table should have their own token. Every open source project, every charity, potentially every fund or these new types of decentralized organizations [and] apps, they’re all going to have their own tokens.”

He added that his own company is likely to host hundreds of tokens within a period of years, and these could possibly swell into millions over time. He maintains that regulation remains key to such a groundswell of token adoption though, suggesting it is more likely that the majority of these tokens will more than luckily be classified as securities.

The exchange has made some major changes over past weeks. They introduced crypto trading pairs for the users in the United Kingdom through the Great Britain Pound (GBP) with a goal to be the trading platform of choice for UK crypto traders, one of the cryptocurrency’s largest world markets. Last month, the San Francisco Exchange introduced a digital gift card program aimed at revamping old business models, offering European clients other ways of accessing cash for crypto.

It’s also been rumored that Coinbase may apply for a Bitcoin ETF from the SEC, joining an already expanding waiting list, though, this hasn’t been confirmed yet by the exchange.

Last week Coinbase also revealed that it is considering the Irish Republic as its next push to expand local markets around the globe. Dublin has been cited as the exchange’s next target and to that end, they have begun an employment drive in the city taking on customer support, analysts, a compliance officer, and an office manager.

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The Music Industry Flirts With Crypto and Reaps the Benefits

Recently, blockchain tech and cryptocurrencies have used their burgeoning popularity to pull in stars from the world of sport, not wanting to miss out on the next big thing on the block. However, musicians are some of the newbies on the front line of the new tech. Some have made more impact than others though.

Better known from his time with band Genesis, Peter Gabriel is an example of one who has no intention of dabbling. Gabriel is an ardent fundraiser for humanitarian causes and a supporter of the British Labour Party to which he has made significant donations.

His investment in the startup, Provenance, was undisclosed but clearly, it’s now contributing towards the company’s expansion of its product. Through Provenance, Gabriel’s money helps provide transparency to food transportation, basically giving the public a better idea of exactly where their food comes from and how it gets there. The Provenance blockchain-based application is predicted to be used in over 1,000 food businesses by 2025.

The ex-Genesis singer and drummer can now add his name to the list with other prominent personalities promoting ICOs over social media in the past year, such as Paris Hilton, Floyd Mayweather, and Katy Perry.

Islandic enigmatic singer Bjork wants her music out there and be purchased with crypto, to which end she hooked up last year with London based Blockpool, allowing her fans to exchange Litecoin, Dashcoin, and AudioCoin for her 2017 album Utopia.

Singer Imogen Heap commented that cryptocurrency has helped her in her recent projects too, particularly with her release of the song Tiny Human on the Ethereum blockchain in 2015, allowing people to download the song in exchange for Ether:

“People paid USD 1, or 1 ETH, which was equal to USD 1 at the time,” she said. “That was USD 200. I didn’t think anything of it and then, of course, it went massively up and I took a bit out and put it into the project, and then it went massively down. It went up to GBP 200,000.”

Senegalese singer AKON with his cryptocurrency Akoin also made the headlines amid plans to build a crypto city, but others from the music industry are getting involved in the blockchain, such as Kanye West.

Never to be outdone, rapper Kanye West tweeted happily earlier this year about blockchain and his version of a digital music service Spotify called Yeezy Sound, aimed to be a decentralized application that would incorporate cryptocurrency. That plan clearly is still in the pipeline, although the trademark applications are in.

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Africa and the Middle East: Crypto and Blockchain News Roundup, 31st August to 6th September 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

Africa

South Africa

Gold-backed interest-free crypto launched in South Africa: A gold-backed interest-free cryptocurrency was launched in South Africa recently called the OneGram and is Sharia-compliant, primarily to attract investment from the Muslim community.

The move was started a year back by a local company that aimed to bridge the gap between cryptocurrencies and precious commodities markets. Muslims and other members of the public who believe that currency should be backed by gold or any other asset of value may be interested in the commodity. It is worth mentioning that the Muslim community is divided on the matter.

Ibrahim Mohammed, the founder of the project said:

“Our approach to OneGram was to create a bridge between commodities and crypto using physical gold and package it together using innovative blockchain technology. This way we are able to give our users the best of both worlds and provide a degree of certainty around the notoriously fickle cryptocurrency market.”

OneGram was founded in Dubai, UAE last year and completed a successful coin offering but it remains to be seen whether the company can deliver on its promise because asset-backed cryptocurrencies are still in their infancy.

Nigeria

Financial exclusion being tackled through blockchain technology: US-based software development company HashCash has announced that it is collaborating with Nigerian banks to solve the lingering issue of financial exclusion.

Financial exclusion is a chronic problem present in many parts of the world including Europe and the Americas. It is a problem through which a sizeable chunk of the population remains unbanked and devoid of electronic means of payment and bank accounts.

HashCash is looking to use the power of the blockchain technology to solve the problem that has plagued the development of many countries and hampered growth.

Zimbabwe

Bitcoin ATM inoperational despite sky-high demand for Bitcoin: Despite high demand for Bitcoin and other popular cryptocurrencies, Zimbabwe’s only Bitcoin ATM is not in operational condition.

Back-breaking inflation has reportedly motivated many Zimbabweans to look to cryptocurrencies as a way to circumnavigate the whole situation. Increased activity on Golix, a popular local crypto exchange, is proof of that but the only ATM installed in Harare by the company is inoperational, as a result of its ongoing legal tussles with the banks.

Still, Golix hopes that the crypto trading ban will be reversed and the ATM will start working again.

Kenya

Economic institute to hold public forum for crypto: The Institute of Economic Affairs of Kenya (IEA-Kenya) has announced that it will hold a series of public hearings, forums and other activities regarding cryptocurrencies to devise public policy proposals in the country.

While the growth of cryptocurrencies is being witnessed in the country, a lack of regulations and resulting regulatory unclarity has made things difficult. Since blockchain and cryptocurrencies are complex issues, the private think tank IEA-Kenya believes public forums could further discussion around them.

The Middle East

Turkey

Turkish stock exchange develops blockchain-based customer database: Turkey’s Borsa Istanbul Stock Exchange has announced the development of a blockchain-powered customer database and resource center.

The stock exchange became operational back in 2013 after a merger of Istanbul Gold Exchange and Turkish Derivatives Exchange (TurkDex) and has a total market cap of USD 133 billion. The recent development was done in customer databases of Borsa Istanbul, Istanbul Clearing, Settlement and Custody Bank (Takasbank), and the Central Securities Depository of Turkey (MKK).

Turkey has demonstrated overall positivity to adopt blockchain technology in recent years.

 

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$100,000 Loan Gone Wrong Shows Why Traders Need to Research Before Investing

A French flight attendant who lives in Abu Dhabi took out a USD 100,000 loan for crypto trading after some previous success but ended up getting burned due to the sudden crash in crypto prices near the beginning of 2018. His tale is a cautionary tale for crypto investors; it is essential to do thorough research and to fully understand the crypto markets before investing.

The flight attendant first heard about crypto on his company’s WhatsApp channel, prompting him to buy some crypto in September 2017. He made quick 300-400% profits during the biggest crypto rally in history, giving him confidence in his trading abilities and a desire to invest even more.

He applied for a bank loan and showed them his profits on his crypto investments and his plans to make money on the loan by investing in Stellar Lumens (XLM), Neo, Ripple, Ethereum, and Litecoin. Shockingly, the bank gave him an AED 367,000 loan, worth USD 100,000 at the time.

His first big mistake was investing completely in altcoins and nothing in Bitcoin. Even the most ardent altcoin developers typically believe that Bitcoin is the most stable of cryptocurrencies, which are extremely volatile in nature. Charlie Lee, the founder of Litecoin, suggests traders keep most of their investment in Bitcoin. It has the most infrastructure, liquidity, and demand, and will be the most stable and profitable crypto for the foreseeable future.

At first, the flight attendant made tremendous profits: USD 30,000 in just ten days. However, this was the end of the crypto rally and crypto markets went from rally into crisis mode. The flight attendant said, “But I did not cash out then. I had no experience in the stock market and just thought the money would grow.”

If the flight attendant had done proper research, he would have seen in past data that cryptocurrency tends to pump and dump. Cryptocurrencies can rise incredibly fast, turning the market into an unsustainable bubble, and then the bubble pops at an unpredictable time and the market crashes.

Now, he is forced to pay back AED 8,000 per month to the bank, two-thirds of his AED 12,000 salary. He says he is holding onto his crypto long term though, which has depreciated to AED 110,000, worth USD 30,000.

Ultimately, this loan disaster tale may end positively for this crypto trader, since Bitcoin tends to go up by an order of magnitude (1,000%) every three years or so. There’s no guarantee that will happen for this flight attendant, especially since he is holding altcoins but history suggests it is possible.

Regardless, the obvious lesson here is that crypto traders need to do thorough research and understand the market before investing. Once the proper amount of research is done, it becomes obvious that taking out a bank loan much larger than your life savings to invest in altcoins is incredibly risky.

 

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