Category Archives: bitcoin

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Analyst Predicts Future of Bitcoin Trading on Wall Street

As cryptocurrencies become more widely accepted by mainstream financial institutions, former Goldman Sachs Investment banker Matt Levine predicts that the future of tradings will be on Wall Street alongside the stock exchange.

With a growing number of investors entering the cryptocurrency market with large sums of capital, banks are beginning to see the economic benefit of facilitating their investments. One of the largest banks in the UK, Barclays Plc has just taken the cue from Goldman Sachs, now offering a Bitcoin trading desk.

The trading desks are designed to help clients make the most beneficial exchanges, while only dealing with cryptocurrencies that comply with all necessary regulations. The banks offer a range of services for their clients, including lending, brokering deals, market-making, custody of finances and market research.

As Levine frames it, the more these services in the cryptocurrency market become critical to clientele, the more banks are expected to provide these services. Hedge funds managing cryptocurrency assets have become increasingly common, requiring banks to handle trades, prime brokers, and serve as custodians.

The biggest issue for banks right now is a lack of clear regulation, as they are strictly prohibited from providing any unregulated services.

Levine has said that banks may be inclined to domesticate cryptocurrency should the demand from clients be high enough. He noted that this trajectory may well be viewed unfavorably by who he describes as ”cryptocurrency true believers”, recognizing that many have adopted cryptocurrencies as a rejection of the traditional financial system.

“[They] may be disappointed if cryptocurrency trading ends up being dominated by the likes of Barclays and Goldman Sachs,” said Levine.

Bitcoin futures contracts have promoted easier entry into the market for fund managers, allowing investors to hedge Bitcoin exposure, or harness its performance with a futures product. Platforms such as CME offer what they describe as a ”cost-effective way to trade financial and commodity markets”.

Whether digital currencies will be fully adopted by big banks is still up for debate, as is how the cryptocurrency community will accept this. The market cap for digital currencies currently stands at around USD 330 billion, a number that Wall Street is surely watching.

 

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12 Japanese Arrested in Fake Cash for Bitcoin Fraud

An alleged scam in Japan has resulted in the arrests of 12 individuals accused of defrauding a Tokyo-based businessman of 190 million Japanese yen (JPY) in Bitcoin (approximately USD 1.8 million).

An investigation between Tokyo and Hyogo police revealed that in July 2017, a Tokyo-based marketing executive was approached by a group of “traders” who offered him JPY 200 million for the equivalent of JPY 190 million yen in Bitcoin. After the deal was carried out between the conmen and the businessman’s agent in a Tokyo hotel, the victim suggested that he wanted to trade covertly to avoid paying commission fees while swapping crypto-to-fiat at an exchange.

The seller then transferred his cryptocurrency to an exchange wallet account in Yokohama, although the fraudsters argued that they didn’t receive the Bitcoin. It turned out that the suitcase exchanged mainly contained false banknotes. Two days later they attempted to convert the stolen Bitcoin into JPY 174.2 million yen through the Yokohama exchange.

Seven men, all in their 20s, were arrested by police last week including the alleged mastermind, 24-year-old Kenta Higashi.

Japan has warmed to Bitcoin in a big way in recent years and legislation now acknowledges it as a legal payment method, despite the Bank of Japan’s ‘Let’s think about cryptocurrencies‘ statement where the bank warned about the likelihood of Bitcoin theft. Despite some notable thefts in recent years, this hasn’t deterred traders. Individual cryptocurrency traders in Japan now exceed three million according to the country’s Financial Services Agency (FSA) figures just released.

Despite frequent incidents of investor fraud and the USD 500 million hacking of a Japanese crypto exchange earlier this year, the country still emerges as a Bitcoin haven due to recent supportive regulatory legislation introduced by the government.

Japan has previously suspended operations of several crypto exchanges on security concerns, although individual groups such as the “Tokyo 12” preying on the vulnerability of a single victim are harder to control.

 

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Amazon’s New Patent Reveals Bitcoin User’s Data

Amazon was granted a patent from the US Patent and Trademark Office on Tuesday, originally filed in 2014, which may conflict with the nature of Bitcoin’s decentralized status.

The patent primarily focuses on the sharing of data with retailers and telecom companies in order to connect transactions and purchases made with the online retail giant to Bitcoin transaction, customer shipping and IP addresses.

Amazon’s patent would allow them to identify participants in Bitcoin transactions and sell the information to law enforcement agencies among others.

It details methods with which Amazon uses its data stores to identify the participants in Bitcoin transactions to sell that information on to subscribers. Data may be stored across multiple availability zones in a region for a set time window. During that window, data is available to be read, re-read, backfilled, analyzed or moved to long-term storage.

This conflicts directly with cryptocurrencies’ guarantee of a high degree of anonymity for its users, a feature that many users find attractive, and partially the reason it has been used to fund criminal activity, a reason frequently cited by governments for its regulation.

Because IP addresses have proven not to convict those involved in illegal internet activity in the past, it appears that this not likely to be Amazon’s gain, although the company sees law enforcement agencies subscribing to transaction data feeds and paying a service fee in order to analyze customer data.

“For example, a law enforcement agency may be a customer and may desire to receive global Bitcoin transactions, correlated by country, with ISP data to determine the source of IP addresses and shipping addresses that correlate to Bitcoin addresses,” reads the patent description.

Cryptocurrency users and supporters are worried in the wake of the Facebook scandal involving Cambridge Analytica. Questions regarding ethical business practices are increasingly being asked of large corporations who have private user data at their disposal.

 

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Europe: Crypto and Blockchain News Roundup, 13th to 19th April 2018

Europe

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.

 

European Union

$100K prize money set for EU hackathon: The European Union is offering a grand prize of EUR 100,000 to the winning team in an upcoming blockchain hackathon. The ‘Blockathon’ event is going to take place in Brussels this year and will be conducted by the European Commision, the European Union Intellectual Property Office (EUIPO) and its observatory on Infringement of Intellectual Property Office (EUIPO).

EU agencies have worked alongside each other to assemble the event. Organizers say that the event is necessary to tackle counterfeit products in the European market.

 

United Kingdom

Barclays to test blockchain technology: Barclays UK is testing the blockchain waters by directing its new ventures unit to study “disruptive technology”. Blockchain and decentralization have so far proved to be the top disruptive technologies in the business and this move is seen with great enthusiasm by the cryptocurrency circles.

The new unit will “accelerate the growth of new business lines… working independently of traditional units” and “develop new customer propositions around major areas of disruptive technology”.

While blockchain technology is not directly mentioned, it is understood that this thinly veiled reference is regarding the new technology that is disrupting businesses around the world.

Every fifth adult willing to buy Bitcoin, 1 in 10 businesses accept crypto:An extended survey of over 1,000 people in the UK has revealed that as many as 1 in 5 Britons are willing to invest in cryptocurrencies, and 1 in 10 businesses already accept cryptocurrency payments. The survey was conducted by communications agency Citigate Dewe Rogerson.

But there was another side to the survey too as 67% believed that cryptocurrencies were too volatile or risky and 43% had concerns regarding regulations, and 61% simply cited their ignorance on the matter. These surprise statistics show the growth of the cryptocurrency revolution inside Britain.

FCA to deliver crypto regulation analysis in 2019: Three of the UK government’s top financial entities, the Financial Conduct Authority (FCA), Bank of England and the UK Treasury are working together to author a discussion paper on cryptocurrencies regulations. The paper will form the basis of any future regulations on the cryptocurrency scene. The FCA business plan of 2018/2019 suggests:

“Cryptocurrencies themselves (i.e. those designed primarily as a means of payment/exchange) are not currently within our regulatory perimeter. However, some models of use or packaging cryptocurrencies bring them within our perimeter, making the landscape complex.”

 

Germany

German stock exchange subsidiary to launch crypto exchange trading app: German interest in cryptocurrencies is growing with a new cryptocurrency app to be released in the autumn to provide traditional stock exchange options. The app is called Bison and is being developed by Fintech startup Sowa Labs, a subsidiary of Boerse Stuggart Digital Ventures. Boerse is Germany’s second largest stock exchange after the stock exchange in Frankfurt.

 

Sowa Labs also conducted an online survey of German crypto traders found out that the majority of the German traders were male and younger than 35 years.

 

Spain

Blockchain project powered by 45 MW of solar power launched: Cryptosolartech, a cryptocurrency mining company is relying on 3,000 servers to mine cryptocurrencies on its new 45 MW solar farm. The farm and the mining facility will be located near Malaga in Andalusia and will attract an investment of EUR 42.8 million. The company is currently banking on an initial coin offering to raise most of the funds.

 

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Quebec Government Defends Bitcoins Liberty

The Chief Scientist of Quebec, Rémi Quirion, has published a report on Bitcoin, taking an in-depth look at the state of legality that Bitcoin faces on a day-to-day basis. It finds no direct link between Bitcoin and criminal activities.

Quirion disagrees with accusations such as that by BlackRock CEO Larry Fink who labelled Bitcoin as “an index of money laundering”, saying that Bitcoin’s distributed ledger technology has helped law enforcement agencies track down illegal activities with ease.

“Bitcoin is not above the law, nor is it a magnet for illicit transactions: it forms only a tiny part of the criminal money circulating around the planet. The reason: it is less attractive for anyone who wants to make transactions without leaving a trace,” said Quirion.

The Center for Sanctions and Illicit Finance of the Defense of Democracies Foundation’s study found that funds linked to criminal activities accounted for only 0.61% of money entering the cryptocurrency ecosystem.

The percentage of Bitcoin transactions as a whole related to money laundering has decreased over the last five years, from 1.07% to a minuscule 0.12% in 2016.

The report cited that Bitcoin was still unregulated, although the Quebec government insists that companies must obtain a crypto specific license before operating a cryptocurrency exchange in the country.

While these figures might challenge commonly-held views about Bitcoin, they come as little surprise to veteran Bitcoin users. Others argue that fiat currency, in particular, the US dollar still ranks highly as currency favored by criminals.

 

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Africa and the Middle East: Crypto and Blockchain News Roundup, 13th to 19th April 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.

 

South Africa

Tax authority may be wrong about crypto: Tax Authority in South Africa, SARS, has announced that cryptocurrencies cannot be considered as currency for tax purposes but will be taxed on assumption that they are “intangible assets”. The move is not welcomed by cryptocurrency traders as intangible assets are subject to “capital gains” taxes and “currencies” are not subject to capital gains at all.

Startup UBU targets poverty: A South African cryptocurrency payment project called Project UBU is aiming to get as many users as possible. The project aims to provide participants with 100 UBU coins per day (equivalent to a few dollars) to individuals living below the poverty line. This program will thus create the world’s first welfare cryptocurrency that is transparent enough for those at the bottom of the economic pyramid.

 

Kenya

Central bank warns against cryptocurrency: The Central bank of Kenya (CBK), through its governor, has once again warned against trading in cryptocurrencies. Its governor, Patrick Njoroge, appeared before a parliamentary committee on finance and gave statements in response to a question from one of the lawmakers.

He said that it was not the first time that the CBK has warned against trading in cryptocurrencies. Back in December 2015, the bank also gave out stern warnings against virtual cryptocurrencies like Bitcoin. However, the governor is at the same time interested in trying out blockchain as a technology.

IBM deploys blockchain-based microfinancing service for food kiosk owners: IBM announced on 18 April that its researchers will soon roll out a new blockchain-based microfinance solution in Kenya later this week in partnership with Twiga foods. Twiga Foods is a B2B coordination platform for kiosks and food stalls in Africa and had previously expressed interest in using innovative financial service offerings to its customers.

According to IBM researcher Isaac Marcus:

“We analyzed purchase records from a mobile device and then apply machine learning algorithms to predict creditworthiness, in turn giving lenders the confidence they need to provide microloans to small businesses. Once the credit score is determined, we used a blockchain, based on the Hyperledger Fabric, to manage the entire lending process from application to receiving offers to accepting the terms of repayment.”

 

Zimbabwe

Bitcoin trading gains ground with new crypto exchange and ATM: Cryptocurrency trading is becoming a popular trading option in Zimbabwe with the addition of a new exchange and ATM in the country. Exchange Golix was already operating in the country for some time and now the competition has increased with Styx24 also accepting applications for cryptocurrency trading.

The cryptocurrency scene is a welcome respite for Zimbabweans that are facing hyperinflation with the government recently printing 100 trillion dollar bills that can only buy basic items. It is a widely held consensus that the fiat system has destroyed the economy and people are now looking at cryptocurrencies to help quell this hyperinflation.

 

Israel

Tightening crypto regulation: The Israeli financial watchdog Israel Securities Authority (ISA) is tightening control over cryptocurrency asset companies registered in the capital Tel Aviv’s stock exchange.

The companies have been given documents that are seen as tightening of crypto-related developments in the country. According to the government agency, the move was done to protect investors from the volatility and risk that comes with investment in cryptocurrencies. As of now, all cryptocurrency setups that deal, hold, invest or mine are being told to keep away from the public.

 

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South America: Crypto and Blockchain News Roundup, 13th to 19th April 2018

South America

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.

Chile

Crypto exchanges fight back on bank blockade: Chilean cryptocurrency exchanges have filed cases in Chilean appeal courts in an attempt to overturn the government’s forced shutdown of cryptocurrency exchanges through three of the largest banks namely Bank of Nova Scotia, Itau Corpbanca and state-owned bank Banco El Estado de Chile.

Three of the country’s largest cryptocurrency exchanges Buda.com, Crypto Market (Crypto MKT) and Orionx are currently blocked from using banks at all. At the time of the ban, the state-owned Banco del Estado de Chile said that it will stop operating “with companies that are dedicated to the insurance or creation, brokerage, intermediation or serve as a platform for the so-called cryptocurrencies”.

Cryptocurrency trading in Chile is significant with Buda alone handling USD 1 million worth of cryptocurrency trades on a daily basis. The defense lawyer was of the opinion that this decision was a gross exploitation of a situation of economic independence.

The reasoning provided by banks has little or no details and the exchanges are buoyed by this lack of detail in securing back their operations in the South American country.

Chile trials transparent blockchain-based energy data for the public: Chile’s national energy organization, Nacional de Energía de Chile (CNE), has announced that it is launching a new pilot project to utilize Ethereum blockchain smart contracts to store energy products and their data from the nation’s abundant reserves.

The CNE issued a press release recently that detailed benefits of using a decentralized system rather than an easily manipulated central security database. The data will be stored in a distributed ledger on EnBenergía Abierta, a database that is stored in hundreds of servers around the country. The public can see and account for the energy data, making for a smooth and transparent government process.

 

Panama

Blockchain embassy in Panama City: Panama has moved forward with a Blockchain Embassy planned for crypto enthusiasts, entrepreneur, activists and connoisseurs opened for the general public. The location is at Balboa Boutiques Strip Mall of Balboa Avenue in Panama City.

Crypto merchandise is available for sale in the new setup as well as themed drinks, new hardware wallets, a coffee ship and a co-working space. In a press release posted on Bitcoin.com, the embassy will also host cryptocurrency workshops, presentations and other events with the general public being welcomed in the Panama crypto community. According to the press release:

“The embassy accepts payments in cash and crypto, and has become an emblematic tourist site in Panama. It receives visitors from all over the world. It is one of the projects created by startup Cryptobuyer.io, known for being the first company in the world to install ATMs in commercial banks, as well as integrating its system Cryptobuyer Pay that allows any commerce to accept payments in Bitcoin and other currencies.”

The site is easily accessible by card and the administration has smartly integrated all of its amenities.

 

Venezuela

Petro cryptocurrency declared as legal tender: The Venezuelan government led by President Maduro has recently decreed state Petro cryptocurrency to be legal tender. The country’s official gazette on 9 April 2018 reported this latest development and President Maduro has also announced that all state institutions will start accepting Petro as legal tender.

Bolivar sees 454% inflation as President Maduro banks on Petro: Venezuela’s stricken economy continues to see hyperinflation of up to 454% in the first quarter of 2018. The Venezuelan Bolivar (VEB) has weakened by an astonishing 8900% in the last 12 months alone. President Maduro, instead of focusing on the hyperinflation, is banking on the new cryptocurrency Petro to quell the ever-increasing hyperinflation in the country.

The hyperinflation has brought the government to the brink of economic collapse and Venezuelans are fleeing the country by the thousands but the focus on Petro, which is at least theoretically backed by oil products, is continued to be seen by the government as an escape route.

Petro awarded Satoshi Nakamoto Prize: Venezuela’s Petro continues to make the headlines despite many problems hawking its development with the first state cryptocurrency recently awarded the Satoshi Nakamoto Prize by the Russian Association of Cryptocurrency and Blockchain (RACB) in Moscow. Russia’s alleged help in launching this cryptocurrency was also reported in previous weeks so this prize comes as little surprise.

 

Brazil

Brazilian crypto businesses, exchanges create rival associations: Top Brazilian cryptocurrency exchanges BitcoinTrade, Mercado Bitcoin, Foxbit and others have recently joined hands to create a new cryptocurrency association Associação Brasileira de Criptoeconomia (ABCripto), whose purpose is to defend the interests of cryptocurrency users and development of the decentralized economy.

Another rival group of like-minded companies have also launched their own platform – the Associação Brasileira de Criptomoedas e Blockchain (ABCB). This group is led by fintech firm Atlas Project.

XP Investments launches crypto exchange: Brazil’s investment giant XP Investimentos Bank that takes care of more than USD 35 billion for over 500,000 clients, has announced the launch of a new cryptocurrency exchange. The new exchange is called XDEX INTERMEDIACAO LTDA and its registered capital is set at USD 7.3 million.

 

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“Big Bitcoin Heist” Escapes on Icelandic PM’s Plane

Robbery suspect Sindri Thor Stefansson has escaped from custody and fled to Sweden on a plane which was reported to have been carrying Icelandic Prime Minister Katrin Jakobsdottir.

Stefansson was being detained on suspicions of being the mastermind behind what has become known in Iceland as “the big Bitcoin heist”, the robbery of 600 computers used to mine Bitcoin.

He escaped from the Sogn open prison in rural southern Iceland early on Tuesday and boarded a plane at Keflavik International Airport some 95km away. He was only reported missing after the flight to Stockholm had taken off.

Stefansson’s plane was also reported to have been carrying the Icelandic prime minister who was on her way to a meeting in Stockholm with five Nordic prime ministers and India’s Prime Minister Narendra Modi.

In what is thought to be Iceland’s biggest theft, the 600 computers worth 200 million Icelandic krona (ISK) – about USD 2 million – were reportedly stolen in four separate burglaries. Stefansson, thought to have been the brains behind the heist,  was one of 11 people arrested. Police have arrested 22 people including a security guard.

Iceland has now become a centre for cryptocurrency mining due to the combination of plentiful renewable energy sources and a cold climate, suited for mining due to low electricity tariffs and low cooling costs. Lower costs generate higher profits for cryptocurrency miners, which have created a situation in Iceland where electricity consumption for mining has overtaken household use.

As yet, the computers haven’t been recovered and the owners have put out a USD 60,000 reward for their recovery. An international warrant has been issued for Stefansson’s arrest and Swedish police are now involved in the search. Several people, including the suspect’s wife, have been questioned by police but no arrests have been made, according to local media.

Iceland with its population of only 340,00 is reputed to have one of the world lowest crime rates.

 

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Nobel Laureate Shiller Concedes Bitcoin May Be with Us for a While

Robert Shiller, the winner of the 2013 Nobel Prize in Economics, has recently softened his stance on Bitcoin. While still perceiving it as a bubble, he now believes it may ”be with us for a while”.

Shiller previously spoke out on his view that Bitcoin was representative of the cryptocurrency market as a whole, in that they were an economic bubble. He appears now to have a slightly more positive outlook on the future of Bitcoin, however.

Speaking with CNBC, Shiller said: ”I’m interested in Bitcoin as a sort of bubble. It doesn’t mean that it will disappear, that it’ll burst forever. It may be with us for a while”.

While he was keen to comment that he was not entirely dismissive of the idea of cryptocurrencies, he noted his belief that the popularity of the concept was more of a psychological trend than something that could be explained by a computer science department.

Influenced by politics

Shiller went on to discuss the political element of Bitcoin often neglected by economists, referring to a significant fraction of society that simply no longer trusted the government. For these people, part of the appeal of Bitcoin was that the government was not involved in its creation. Rather, it was developed by a qualified computer scientist.

As Shiller put it, ”It’s a great story for today’s markets”.

There are indeed a number of self-proclaimed libertarians that follow cryptocurrencies, as they believe it has the power to reduce unnecessary government intervention in peoples economic lives.

Yale University currently enrolls Shiller as professor of economics. He was one of the only major economists to correctly predict the housing crisis bubble in the US.

The value of Bitcoin is steadily recovering from its depreciation at the beginning of this year. The value of one Bitcoin at the time of writing stands around USD 8,150, after reaching just shy of USD 20,000 in December of last year.

 

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Bitcoin Price Analysis, 18th April 2018: Volatile BTC/USD Markets Back Above $8,100

Bitcoin markets are yet again going through a period of increased volatility. With a decent but not unheard of increase in trading volumes, a few bullish breakout patterns can now be observed. Notable events through the day’s trading session would be a couple of bearish breakouts and responding pullbacks, all contributing to the increase in volumes.

The day’s signals

  1. Volatility continues to rule for yet another day with large buy and sell orders seemingly being able to handle Bitcoin markets.
  2. A bullish market sentiment seems to be the winner through today’s trading session with BTC/USD prices now moving up after consolidations.
  3. Most of the day’s trading volume’s come from a few condensed trades. Support for the reached price levels remains questionable.

BITCOIN bitfinex-btcusd-Apr-18-2018-24-58-45

GDAX BTC/USD charts are indicative of the battleground Bitcoin markets were throughout the day. Traders went through a major bullish breakout, with prices being pushed from USD 8,100 levels down to a low of USD 7,800. After an extended consideration period, a bullish pullback got prices back above USD 8,100 levels. The market didn’t show resistance to the upward spike. However, that wasn’t until another selloff would occur. Prices briefly dipped below USD 8,000 again only to recover briefly after a couple of hours. Through the more recent hours, another spike caused prices to jump above USD 8,200 briefly.

BITCOIN okcoin-btcusd-weekly-futures-Apr-18-2018-24-58-48

OKEX BTC/USD weekly futures charts still showcase anguish from Bitcoin futures traders. The divide between futures prices and live market prices remains. Today’s volatility doesn’t seem to have improved the landscape for futures prices as the divide increased at times. Futures traders are of course pricing in the bullish pullbacks but appear to be all too skeptical. It appears as though volatility doesn’t impress futures markets anymore, even if it’s followed by a bullish sentiment.

All in all, many bullish signals made rounds through Bitcoin markets through the day. However, the outcome of such a trading session is quite uncertain without any support showcased. Today’s consideration periods were accompanied by low volumes, with only breakouts appearing to make decisive moves. All in all, it remains to be seen if the bullish market sentiment contrasting previous trading sessions will be sustained.

 

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