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US Department of Justice Opens Criminal Case into Bitcoin Price Manipulations

The US Department of Justice (DOJ) has opened a criminal investigation into whether traders are manipulating the price of Bitcoin and other cryptocurrencies, according to a report published Thursday by Bloomberg.

The most notable concern coming from the DOJ relates to a suspected potential that the volatility of the market creates an opportunity for investors to push price valuations in a way to favor themselves.

Additionally, authorities feel cryptocurrencies are particularly susceptible to fraud due to a concern over the lack of regulations, as well as skepticism that every exchange actively pursues those deceiving the rules of the platform.

Spoofing and wash trading

People familiar with the situation told Bloomberg that the DOJ is specifically looking into spoofing and wash trading from colluding traders. These two illicit tactics are forms of market cheating that have been combated by regulators in the futures and equity markets for years.

Spoofing involves a trader submitting a number of orders, then cancelling them once they are satisfied they have affected the prices enough in the desired direction.

Wash trading involves a cheater creating trades with themselves to create a false impression of market movements, which influences others to move in a specific way.

It was reported that both Bitcoin and Ether are being investigated for this, but the DOJ declined to comment on the case at Bloomberg’s request.

Protecting investors

After a Bitcoin price surge last year spanning between USD 1,000 and USD 20,000, the cryptocurrency industry has found a host of new supporters and investors. The number of ICOs has also skyrocketed, with a growing number of people aware and involved with altcoins.

Regulators across the globe are now seeing the industry as a growing concern, as investors enter the market without a clear understanding of what cryptocurrencies are, and the risks involved.

Cryptocurrency exchange platforms operate internationally, with many remaining unregistered with any government agencies, leading to a heightened fear of fraudulent activities in general.

Of course, the vast majority of platforms maintain there own strict security measures to protect users and are willing to pursue fraudsters, if not only to protect their own reputation.

 

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Almost Essential to Include Crypto in Your Portfolio, Michael Novogratz Tells CNN

Speaking to Maggie Lake on CNN Wednesday, billionaire bull and CEO of Galaxy Digital Capital Management Michael Novogratz, suggested that every investor should have 1% to 2% of their portfolio in cryptocurrency, declaring it ”almost irresponsible” not to.

”Challenging every verticle”

The reasoning behind Novogratz’ statements is not because of any potentially massive financial gains that cryptocurrencies might make, but because of the blockchain technology behind them. ”These technologies in two to four years are going to give every verticle a challenge,” said Novogratz, referring to blockchain.

Blockchain has been generally received with more widespread positivity than cryptocurrencies, particular from financial institutions and governments. The technology allows transactions to take place nearly instantaneously, recording all payment data from those using the service.

Even NASA recently gave its backing, utilizing the Ethereum blockchain in a project that would increase the efficiency and safety of deep space travel.

Another prediction provided by Novogratz outlined a vision that sees the New York Stock Exchange incorporating cryptocurrency trading within six months.

When Novogratz was questioned on acclaimed investor Warren Buffett’s recent critical comments that described Bitcoin as ”probably rat poison squared”, his response perfectly summed up the sentiment of many cryptocurrency enthusiasts. “In a lot of ways, this is a Millennial-led revolution… what I’ve found is guys with gray hair [are] much more skeptical,” he said.

More on Novogratz

Novogratz was also promoting the launch of his firm’s collaborative project with Bloomberg, the Bloomberg Galaxy Crypto Index. The cryptocurrency index was launched Wednesday and is currently tracking ten digital currencies including the main players Bitcoin and Ethereum.

His previous job roles include hedge fund management at Fortress Investment Group and a partnership with Goldman Sachs.

During the interview, he disclosed that 10% of his net worth was currently held in cryptocurrencies.

 

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Circle Invest Adds Monero Functionality

Investing app Circle Invest has announced that it is adding Monero (XMR) to its list of supported cryptocurrencies. Currently, it includes functionality for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), and Zcash (ZEC). Circle allows for instant buying and selling directly connected to user bank accounts.

Monero has a market cap of USD 3.75 billion as of this writing, and is unique from Bitcoin in that it uses the CryptoNote protocol, which obfuscates sender, recipient, and transaction amounts. This makes Monero virtually untraceable, and is a preferred cryptocurrency when anonymity is the priority.

Circle was founded in 2013 and since that time has become one of the most popular places to buy and sell cryptocurrency. The company trades over USD 2 billion of cryptocurrency per month, providing excellent liquidity for traders and investors. Circle Invest doesn’t charge any commissions on investments, making it much more attractive than investing in stocks which almost always requires paying a broker commission. There is a 1.5-2% spread between buy and sell prices on Circle Invest, which is how it makes money, but such a spread is completely normal for a cryptocurrency exchange.

A caveat of Circle Invest is that users can’t withdraw their coins into personal wallets. Instead, they must keep coins in the Circle Invest wallet, and as cryptocurrency prices fluctuate their USD equivalent balance changes. The user can sell their coins at any time for USD which is directly deposited into their bank.

Generally, it is best to move coins into a personal wallet when investing in cryptocurrency, to ensure that coins are fully in possession and secure. However, this makes selling much slower than when using Circle Invest as it takes times to send cryptocurrency from its wallet to an exchange. Also, when buying cryptocurrency from an exchange that allows users to withdraw coins, it generally costs at least 5% of fees, on top of the spread between buy and sell prices, resulting in significantly more costs than when using Circle Invest.

Circle Invest is expected to add even more cryptocurrencies and digital assets in the future in its quest to become the top cryptocurrency investment platform.

 

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Image source: https://www.flickr.com/photos/159526894@N02/41806741152/ – descryptive.com

 

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Are The Rothschilds Investing in Bitcoin?

Recent developments appear to confirm that the Rothschild family have entered the cryptocurrency market, following earlier reports that they began purchasing the assets through the Bitcoin Investment Trust (GBTC) in 2017.

The Rothschild family are more well known for their close relations with banks and other financial institutions, rather than advocating for a decentralized currency system. It has been reported, however, that the family has been active in cryptocurrency trading for a sizeable period of time.

In the footsteps of Soros

This news follows George Soros’ apparent entry to the cryptocurrency market earlier this week. The Soros Fund Management enterprise was reported to have gained internal approval for the trading of virtual coins for asset management purposes. There are no known records of large trades taking place on behalf of Soros yet.

In January, Soros denounced cryptocurrencies as a ”bubble”, so his recent change in opinion came as a surprise to many. Following his negative labelling of digital currencies, Bitcoin was subject to a market devaluation of approximately 40%, leading some commentators to speculate if his comment was designed for this purpose.

It does raise questions that these high-profile individuals have chosen to enter the market at this point after the price crash, while no longer speaking in an openly negative way about Bitcoin.

These questions aside, the cryptocurrency market should benefit from an injection of new investment, and with financial moguls like Soros and the Rothschilds coming into play, this could create a momentum for more high-profile figures to join them.

It makes for an interesting development that might influence Bitcoin’s future, even if the impact has yet to be determined.

 

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UK Financial Conduct Authority Warns Firms About Crypto Derivatives

The UK Financial Conduct Authority (FCA) has issued a warning to firms that deal with cryptocurrency derivatives, as they likely require authorization from the agency to do business.

Posted Friday on the official FCA website, the statement advised that cryptocurrency derivatives have the qualities necessary to be considered tradeable assets. As the statement reads, this means that firms involved with regulated activities using cryptocurrency derivatives are subject to FCA guidelines, as well as any relevant provisions indirectly applicable to European Union regulations.

Despite the FCA declining to acknowledge cryptocurrencies as either currencies or commodities in regards to regulation, the statement notes that it is ”likely” that firms offering cryptocurrency derivatives require authorization to do so.

This would potentially require companies holding initial coin offerings (ICOs) to comply with the FCA guidelines, although the statement noted that this would depend on the nature of the token offered.

Other areas outlined that would fall within the FCA’s regulatory parameters include cryptocurrency futures, cryptocurrency contracts for differences (CFDs) and cryptocurrency options.

The final warning of the statement precautioned firms that neglecting to authorize activities under the FCA’s regulation is a criminal offense. The statement finished, ”Authorized firms offering these products without the appropriate permission may be subject to enforcement action.”.

The FCA on the industry

In 2016, the FCA said that there were no plans in place to regulate the blockchain industry for the time being, as it needed what it described as space to develop.

However, the agency has been outspoken on its unfavorable view towards cryptocurrencies and ICOs. Chief executive of the FCA Andrew Bailey said in December 2017 that Bitcoin investors must be prepared to ” lose all your money”. He compared cryptocurrency investments as similar to gambling.

December 2017 also saw the FCA announce a further study into ICOs, scheduled to determine if there was a need for further regulatory action depending on the applicability of UK laws to the investment model of ICOs.

 

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Japan: 14% Of Young Male Workers Have Crytpo Holdings

A recent survey conducted of working males aged 25-30 in Japan reveals that 14% of this group own some form of cryptocurrency, as first published by local online magazine Shin R25, on 3 April.

Despite media frenzy over Bitcoin’s recent plunge in value, this has not deterred the young working men of Japan from investing. The study surveyed 4,734 participants across Japan, between January and March of this year, with over a quarter of respondents reporting that cryptocurrency holdings constituted their first investment.

Of the participants surveyed that owned crypto, 92% noted that they entered the cryptocurrency market for investment purposes. This is indicative of recent investment trends in the younger generation, that see the group withdrawing from traditional forms of investment such as stocks and bonds.

The questionnaire surveyed these trends in investment for first-time buyers, finding 24.3% purchased their assets between October and December 2017, with 15% choosing to enter the market in either January of this year or later, as the value of Bitcoin decreased.

When questioned on the total sum of their investments, 34.5% recorded that they owned less than 50,000 Japanese Yen (JPY), approximately USD 469, while 10.2% said their holdings totalled JPY 1 million or more, approximately USD 9,360 and above.

In regards to the future plans with their holdings, 47.1% reported that they would like to actively invest in the market, with 34% saying they did not intend to continue investing.

Finance and cryptocurrency analyst Joseph Young noted on Twitter that even in such a leading cryptocurrency market as Japan, such a high figure of investment is surprising.

A study found that 14% of employees in Japan aged 20~25 years already invested in or hold cryptocurrencies like bitcoin and Ethereum.

This is a surprisingly high adoption rate, I expected less than 10%, even in a leading cryptocurrency market like Japan.https://t.co/MwJtjmf1KQ

— Joseph Young (@iamjosephyoung) April 4, 2018

If the younger generations continue to adopt cryptocurrency as a primary form of investment, this is likely to increase the aggregate value of virtual currencies such as Bitcoin. Head of the research department for Fundstrat Tom Lee, recently reiterated his prediction that bitcoin would end the year valued at USD25,000.

The survey follows the news in January of hackers infiltrating Japenese cryptocurrency exchange platform Coincheck. Approximately USD 534 million was stolen in the form of NEM tokens. The Japanese Financial Services Agency acted by sending business improvement notices to seven similar platforms and temporarily suspending operations of another two.

 

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Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

All News – Daily E-mail Subscription  – Twitter: @BitcoinNews

Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

All News – Daily E-mail Subscription  – Twitter: @BitcoinNews

Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

All News – Daily E-mail Subscription  – Twitter: @BitcoinNews

Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

All News – Daily E-mail Subscription  – Twitter: @BitcoinNews