Cryptos Continue To Surge As Tax-Day Passes
by Zero Hedge - April 20th, 2018 8:11 am
Courtesy of ZeroHedge. View original post here.
Crytpocurrencies are continuing their post-tax-day gains with Bitcoin above $8500, Ethereum at almost $600, and Ripple up over 30% on the week.
With Bitcoin back above $8,500…
And Ethererum is back above $550 – testing towards $600…
Certainly for now, the anecdotal performance suggests Tom Lee's tax-based-selling these is playing out with strength continuing, but, we also note that The Sovereign Investor believes the most important crypto indicator just turned bullish.
As the crypto asset class evolves, similar patterns and indicators used by traders in other asset classes are emerging.
One of these is the tendency of markets to be in either “risk on” or “risk off” mode.
Investors are either willing to take on more risk through buying riskier assets, such as tech stocks with little to zero earnings; or they are looking to take less risk, adding either gold or U.S. Treasurys to their portfolios.
As the oldest and most liquid crypto asset, bitcoin is considered “digital gold.” It can be exchanged for more altcoins than any other crypto and serves as the main entry and exit point to fiat currency.
On top of that, there are thousands of merchants that accept bitcoin as payment, providing users another exit to the crypto markets.
Bitcoin has been able to maintain crypto hegemony even through significant faults: Transaction speeds are much slower than rivals, and fees tend to skyrocket when the network is busy.
Many contenders have tried, but none have successfully replaced bitcoin atop the crypto throne, and it remains the “store of value” within the crypto asset universe.
This unique position allows it to outperform other crypto assets when investors are moving away from risk. As the crypto asset class evolves, similar patterns and indicators used by traders in other asset classes are emerging.
One of these is the tendency of markets to be in either “risk on” or “risk off” mode.
Investors are either willing to take on more risk through buying riskier assets, such as tech stocks with little…
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Only 0.04% Of Taxpayers Are Reporting Any Bitcoin Gains To The IRS
by Zero Hedge - April 16th, 2018 10:55 pm
Courtesy of Zero Hedge
With the US tax deadline just one day away, crypto investors who traded actively during the market's run-up and inevitable meltdown should have a lot of activity to report to the IRS.
But according to a survey conducted by Credit Karma, only a handful of people who have filed their taxes using Credit Karma's tools have reported bitcoin holdings or holdings of some other cryptocurrency – fewer than 100 out of a total of 250,000 filers, or a whopping 0.04% in total.
In all likelihood, this means that (tens of) thousands of bitcoin traders are refusing to pay the IRS, either betting on the anonymity of the blockchain to conceal their identities, or perhaps in some cases they simply don't have the money to pay, having lost most of their profits during the market's spectacular meltdown, as was the case for one anonymous trader who complained on Reddit that he owed the IRS $50,000 that he didn't have, according to CNBC.
"If I had to guess, there's probably a lot of underreporting," said Elizabeth Crouse, a Seattle-based partner at law firm K&L Gates. "Most of the people in the cryptocurrency world tend to have a pretty high risk tolerance."
Bitcoin had its best week in four months last week as selling pressure that appeared to coincide with the US tax season appeared to dissipate.
Meanwhile, Fundstrat's Tom Lee and other analysts have predicted that "a massive outflow" of cryptocurrency to fiat ahead of tax day in the US had created a massive overhang, and that the bitcoin price could shoot higher after tax day.
In a report last week, Lee noted that, since US households owe an estimated $25 bln in capital gains taxes due to their crypto holdings, and crypto exchanges also will owe income taxes, both households and exchanges will be selling their crypto to pay the US government:
“We believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions. Many exchanges have net income in 2017 [of more than] $1 bln and keep working capital in [Bitcoin]/[Ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”
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Crypto-mania Returns: Bitcoin Soars $1000 In Minutes, Most Since 2017; Back Above $8000
by Zero Hedge - April 12th, 2018 8:03 am
Courtesy of ZeroHedge. View original post here.
The last 30 minutes has seen Bitcoin explode higher by over 15% (the biggest move since 2017), breaking above $8,000 on extremely heavy volume as the cryptocurrency tests above its 200-day moving-average.
Speculative chatter on the driver behind the move is Russian oligarchs buying (though we note that Bitcoin actually fell on the announcement of the sanctions last week). This is obviously unconfirmed…
Have Russian billionaire oligarchs started converting their net worth into crypto
— zerohedge (@zerohedge) April 10, 2018
Additionally, and perhaps more likely, this is a reflexive easing from the tax-related selling pressure that many have discussed as a big driver of cryptos downside ahead of next week's tax deadline.
Extremely heavy volume on this upswing… The move peaked at around 16%, before fading back to a more stable 11% gain.
Bitcoin is testing its 200DMA…
It's not just Bitcoin, the entire crypto space is bid for now…
While this panic-bid is notable – the biggest spike since 2017 – the price of bitcoin has nearly halved in the four months of the year so far, and its unlikely to top its all time high of $19,843, set in December, ever again, Barclays says.
"Unlike past peaks in Bitcoin prices, the survey evidence, based on our modeling, suggests that the speculative bubble in crypto currencies may have passed its peak," the bank said as part of its annual Equity Gilt report this week.
Here's where the bank's model predicts bitcoin's price will go from here:
Unsurprisingly, as BI reports, the team of analysts led by Joseph Abate say there's a striking similarity between bitcoin's rise in popularity and the spread of viruses like influenza.
"Applying this model to speculative behaviour in crypto currencies, it suggests that once a large enough share of the population susceptible to speculation becomes aware of and holders of crypto currencies, upward pressure on prices stalls," they write. "To the extent that holders’ attraction to Bitcoin was speculative – as our empirical analysis of historical prices suggests – those holders then become sellers, initiating an accelerating downward spiral."
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Former Mt. Gox CEO Says He “Doesn’t Want” $1 Bilion In Leftover Liquidation Funds
by Zero Hedge - April 5th, 2018 8:30 pm
Courtesy of ZeroHedge. View original post here.
Submitted by CoinTelegraph
Defunct Bitcoin exchange Mt. Gox’s ex-CEO claimed in a statement April 4 that he “doesn’t want” the 160,000 BTC ($1.12 bln) that will be left after the exchange repays its creditors.
As part of a Reddit Ask Me Anything (AMA) session Wednesday, Mark Karpeles said that he found the billion dollar windfall, which will come about as a result of Japanese bankruptcy procedures, to be “distasteful”.
“The way bankruptcy law works [in Japan] is that if there are any assets remaining after the creditors have been paid in full, then those assets are distributed to shareholders as part of the liquidation,” he explained in introductory comments.
“That's the only way any bankruptcy law can reasonably work. And yet, in this case, it produces an egregiously distasteful outcome in that the shareholders of MtGox would walk away with the value of over 160,000 bitcoin as a result of what happened.
I don't want this. I don't want this billion dollars.”
Karpeles has presided over the long process of refunding users who lost funds during Mt. Gox’s infamous hack in 2014.
After being released on bail, the Frenchman has periodically appeared in the press and online to answer queries from the cryptocurrency community.
Criticism of both Karpeles and the refund process intensified in recent months after it came to light a board trustee was selling vast amounts of Bitcoin on mainstream exchanges. The volumes were so large that suspicions remain the sales unfairly influenced Bitcoin prices across the globe. Wednesday’s AMA similarly saw its share of Karpeles detractors, some levelling criticism due to their questions remaining answered for long periods.
Separately, Bloomberg reported that Karpeles said he no longer is a Bitcoin believer, and sounded pessimistic about cryptocurrencies in general. “The technology is definitely here to stay, but Bitcoin may have trouble evolving and keeping up. I could be wrong about this. I’ve been wrong about a lot of things.”
Karpeles, originally from France,…
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Rise of cryptocurrencies could curb American power
by ilene - April 4th, 2018 11:59 am
Rise of cryptocurrencies could curb American power
Courtesy of Nicholas Ross Smith, University of Nottingham and Zbigniew Dumie?ski
There has been a lot of talk in foreign policy circles of the coming post-American world – in which the international system will transition from a unipolar to a multipolar system. But, as we currently stand, the US remains unquestionably the foremost power of the contemporary system.
Much of this perceived power is built on its position at the heart of the international trade and finance system. It’s not the rise of another powerful state that could disrupt this. Instead, it is the rise of a new system of finance, trade and technology, in the form of cryptocurrencies that could subvert US power.
Yes, China continues to rise, both economically and militarily, at an incredible rate. And India, although some way off, is experiencing a similar power trajectory. Russia too has experienced a resurgence under Vladimir Putin, reclaiming its position as an important global power, as evident by its role in the ongoing Syrian civil war.
US military might outstrips any other country. shutterstock.com
But neither China, India, nor Russia has anywhere near the power the US does right now. Whether it is hard power or soft power, the US has significant advantages over the nearest challengers.
In addition to this, the US arguably gains added insulation from decline from being the kingpin of international trade and finance. Not only is the US home to most of the world’s important corporations and ongoing technological advances, the US dollar remains the unchallenged global reserve currency.
Whether the US’s dollar hegemony is a blessing or a curse has long been a hotly debated topic. Materially, there are some clear advantages and some clear disadvantages to the US when it comes to its international political power.
Arguably, what is more important than the material benefits is that the perception of American power from its privileged international trade and finance position is widespread.
Even…
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Wait – did I call the top in Bitcoin?
by ilene - April 2nd, 2018 5:20 pm
Wait – did I call the top in Bitcoin?
Courtesy of Joshua M Brown
Last July, I bought my first Bitcoin and announced it here on the blog. I was the ultimate noob, but too curious to stay out. I bought it right as it was about to break a new record high above $2300. It broke out, sure enough, and then went on to run to 19,000 and change, one of the biggest bull markets I’ve ever seen.
I rode it. Skeptically. I played around with ETH and LTC too. The amounts were never serious for me, but I had a lot of fun meeting experts in the field, setting up my storage, etc. I even recorded a PSA for CNBC.com warning moms and pops that the whole thing was pure speculation – no fundamentals, and that crashes were a regular feature of digital coins and tokens. I said ICOs would be a giant fraud (this call I will take credit for) last September.
And then, after attending a private Bitcoin dinner / discussion in Manhattan with some of the top people in IT for Wall Street investment banks, I grew extremely skeptical. I decided I was done buying into the scarcity argument that very night. More importantly, I was done accumulating any crypto currencies for good.
I wrote about it the next day in a piece that generated a substantial amount of feedback, called A Twist.
My bearish take was geared around the fact that blockchain had major potential as a process and administrative tool for companies all over the world – but none of this had anything to do with the prices of coins going up or down. So I became one of those “bullish on the distributed ledger, bearish on the coin” people that the diehards seem to hate so much.
This guest post I ran for The Unassuming Banker – The Fatal Mistake Crypto Investors are Making Right Now – went viral throughout both the Finance and Crypto blogosphere. A crossover! People were f***ing pissed.
And then I shut my mouth and just read and listened. And the…
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Crypto Carnage Continues – Bitcoin Back Below $7,000, Ether Under $400
by Zero Hedge - March 30th, 2018 8:20 am
Courtesy of ZeroHedge. View original post here.
Despite a brief bounce overnight, cryptos are sliding once again with Bitcoin below $7,000; Ethereum below $400; and Ripple back below 50c.
"It's a sea of red," said one seasoned crypto-trader, adding after a stoic pause, "again!"
Bitcoin is back below $7,000…
Heading towards its early Feb lows…
As CoinTelegraph notes: the overall market slump could be attribued to both Twitter’s recent announcment that would ban crypto-related ads, following on the heels of similar announcements from Google and Facebook, or Mailchimp’s apparent closure of crypto-related accounts.
In response to the social media ad bans, crypto and Blockchain associations in Russia, South Korea, and China have created a joint assocation in order to sue the social media giants, including Yandex, referring to the bans as “market manipulation” by “monolopies.”
Regulatory crackdowns on crypto could also be compounding the market’s downward trend, as two Japanese exhanges this week have decided to close instead of working with regulators for compliance.
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Techlash Crushes Cryptos – Bitcoin Tumbles 50% In Q1, Back Below $8k
by Zero Hedge - March 29th, 2018 10:38 am
Courtesy of ZeroHedge. View original post here.
Bitcoin has tumbled overnight, back below $8,000, and is now down 48% year-to-date, as cryptocurrencies have accelerated lower this week amid the carnage in tech stocks.
Bitcoin's dead-cat-bounce did not last long…
But the week has been a bloodbath for all cryptocurrencies…
And the overnight weakness is most interesting considering the PBOC appeared to ease back away from its blanket bans on cryptos somewhat. Bloomberg reports that the Chinese central bank will promote digital currency research and development, Deputy Governor Fan Yifei said at a national currency, gold and silver work conference, according to a statement on PBOC website.
Overnight also saw two Japanese crypto exchanges choose shutdown as opposed to regulatory compliance. As CoinTelegraph reports, Japan’s financial services regulator continues to reshape the country’s cryptocurrency exchange industry as two operators announce they are closing, local source Nikkei states March 28.
Two Japanese exchanges, Mr. Exchange and Tokyo GateWay, will cease trading once they have returned customer funds, according to Nikkei.
The news comes as financial regulator, the Financial Services Authority (FSA) challenges exchanges to prove their security credentials in the wake of Coincheck’s $530 mln hack in January.
As a result of FSA inspections and requests, several operators have opted to stop servicing the Japanese market, Cointelegraph previously reported.
Prior to their closure, Mr. Exchange and Tokyo GateWay were both in the process of securing a license as part of a scheme introduced by Japan in April 2017.
In a blog post March 29, the former confirmed it had withdrawn its application:
“While this is a regrettable result, at present we have determined that it is difficult to be in a state of readiness to be able to respond to changes in the virtual currency landscape, so we decided to withdraw the application for a virtual currency exchange business.”
Tokyo GateWay’s website is currently offline, with no official correspondence available to confirm the Nikkei report.
The FSA meanwhile continues to drip-feed new market players to Japanese consumers, with 16 exchanges obtaining a license since the
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Yahoo Japan Plans To Launch Cryptocurrency Exchange Amid FSA Crackdown
by Zero Hedge - March 24th, 2018 8:30 pm
Courtesy of Zero Hedge
Japanese crypto regulators sent crypto prices spiraling lower earlier this month when they announced a heavy-handed crackdown on seven local cryptocurrency exchanges (and ordered month-long suspensions for two more).
As CoinTelegraph reports, the Japanese Financial Services Agency (FSA) has sent “punishment notices” to seven crypto exchanges and temporarily halted the activities of two more after a round of inspections prompted by January’s Coincheck hack, CNBC reports Thursday, March 8.
The FSA issued business improvement orders for a lack of “the proper and required internal control systems” to seven exchanges, including Coincheck, which was specifically cited as lacking a system for preventing money laundering and the financing of terrorism.
The crackdown followed a historic theft of more than $500 million of NEM tokens from the Japanese exchange CoinCheck, which had been attributed to the fact that the exchange stored its customers' funds in a low-security wallet. Regulators also discovered that an employee at unlicensed exchange Bit Station had improperly accessed customers' coins.
And yesterday, the FSA warned Binance, a popular Hong Kong based exchange that was launched last year after issuing an initial coin offering, that it must either obtain a license or cease operating in Japan.
Meanwhile, in what appears to be a bid to avoid scrutiny from the FSA, Japan's 16 licensed cryptocurrency exchanges are planning to launch a self-regulatory body similar to FINRA.
Perhaps sensing an opening, Yahoo Japan is planning to launch a regulated bitcoin exchange, according to a Nikkei report published Friday. Instead of building the exchange from scratch, Yahoo Japan plans to acquire a 40% stake in BitARG Exchange Tokyo, one of the 16 licensed exchanges, and use its technology to build a new exchange, to be launched in April 2019, or later.
The shares will be purchased for 2 billion yen ($19 million) via BitARG's subsidiary YJFX, a forex trading platform.
The news had no discernible impact on crypto prices, which continued to drift lower Friday morning.
Earlier this week, Japanese officials attending the G-20 summit in Buenos Aires defended cryptocurrencies, arguing they were not a threat to broader financial stability…
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Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money
by ilene - March 20th, 2018 10:09 pm
Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money
Courtesy of Anwar Halari, The Open University
If you haven’t already heard of Bitcoin, you either haven’t been paying attention or you’re a time traveller who just touched down in 2018. Because by now, most of us will have heard of Bitcoin and some of us have even jumped on the bandwagon, investing in cryptocurrencies.
But despite its popularity, many people still don’t understand the technology that underlines it: blockchain. In very simple terms, blockchain technology is an open access shared ledger that keeps a record of all the transactions between parties and allows all users to agree on its contents. New information is added in blocks linked to the previous blocks, resulting in a chain of blocks being built.
This ledger is verified by “miners” to make sure it’s true – and so creating an audit trail. Past records can be viewed but not altered without the consent of the majority. And it is this technology that is behind cryptocurrencies such as Bitcoin – the value of which rose almost 1400% in the past year, but has at times, also fallen massively too.
Crypto is here to stay
It can certainly be anticipated that this evolutionary technology is set to spark a huge revolution in the business world. It’s already being trialled at governmental level, from the Sweden Land Registry, to the Big Four accountancy firm such as E&Y – who accept Bitcoin as payment for its consultancy services.
The Australian Securities Exchange is also considering the use of blockchain technology to replace the current clearing and settlement system of share trading. And even the Bank of England is planning its own Bitcoin-style virtual currency.
Listen to The Conversation’s Anthill podcast episode: Bursting the Bitcoin bubble
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
