A veteran investor who once called bitcoin a “real fraud” flipped his critical views amidst a gloomy macroeconomic outlook.Mark Mobius, the founder of Mobius Capital Partners LLP, said in an interview that he would probably buy bitcoin as a protection against the Federal Reserve’s dovish stance on the economy. The emerging markets maven held the cryptocurrency higher in terms of faith, citing people who, despite being small in number, trust it.“If [bitcoin] continues and grows, then I would probably have to a buyer and be involved in this,” Mobius told Bloomberg.He added that fiat currencies around the world — be it the US dollar, Chinese Renminbi or the Euro — also function because of people’s faith in it. That makes bitcoin no different than any government-backed asset. At the same time, Mobius expressed his cluelessness about the bitcoin’s actual value, admitting that it would be difficult to estimate how much he should pay for buying one bitcoin.“Unless it is so widely held and accepted then that’s a different story,” added Mobius.Then and NowThe statements appeared reminiscent of what the 82-year old financial veteran had said in December 2017, ahead of Bitcoin’s meteoric rise to the $20,000 level. Back in time, Mobius had admitted that the cryptocurrency is faith-driven. But he didn’t have any interest in participating in its economy even if its adoption grows.Top investor Mark Mobius weighs in on the outlook for bitcoin #TheYearAhead https://t.co/vECJChXWKW pic.twitter.com/HDEyu0WAG4— Bloomberg Markets (@markets) December 6, 2017Bitcoin’s subsequent crash in 2018 strengthened Mobius’ anti-bitcoin views. FN London quoted the 82-year old finance veteran last year saying that bitcoin was, to him, was something that “makes tulips look bad.”“I think bitcoin is a real fraud, I [really] do,” Mobius told Reuters in 2018. “The first thing I do is ask people, ‘can you explain it to me? Who is running it? Who is controlling it?’ And nobody can.”But bitcoin, nevertheless, profited from a growing infrastructure and adoption. Upon crashing from $20,000 to $3,126.68 in just 12 months, the cryptocurrency rebounded by more than 275 percent to settle a year-to-date high of $13,868.44. The move uphill closely followed a positive statement about bitcoin issued by Mobius this May. The investor said:“There’s definitely a desire among people around the world to be able to transfer money easily & confidentially […] so I believe it’s going to be alive and well.”Gold and Stocks are a Still Better ChoiceThe Federal Reserve’s dovish stance sent the US yield, which shows rates on bonds of differing maturities, down. The move cemented a grim outlook for the US economy in the long-term. At the same time, the S&P 500 equity market benchmark closed at a 2,995.82 high ahead of the independence day holiday, creating a significant divergence between the bonds and stocks as a whole.US Yields and Stocks are Moving in Different Direction | Image Credits: BloombergRecognizing that investors might look into bitcoin as a safe haven, Mobius stated the best place to keep money is in either Gold or stocks. He added:“If you are not getting anything in the bank with these lower rates, it makes sense to have a little gold in your portfolio. And I believe that’s happening in addition to the fact that Russian’s and other central bankers stocking up on gold.”
Archives for July 5, 2019
Bitcoin basher Peter Schiff has been quietly holding some of the biggest cryptocurrency. Schiff, who is a gold bug, has been incessantly cranky on crypto and recently characterized bitcoin investors as “dumb.” The shoe is on the other foot now, as it turns out the Shiff, who is the CEO of Euro Pacific Capital, received roughly $100 worth of bitcoin as a gift and has been holding it ever since.
Morgan Creek Digital’s Anthony Pompliano brought it up on Twitter, and Schiff didn’t deny it, deciding instead to provide more details. This inspired Pompliano to offer to send the crypto skeptic more bitcoin. After one failed attempt, Schiff found his BTC wallet address and tweeted it.
I own about $100 worth. It was a gift.
— Peter Schiff (@PeterSchiff) July 5, 2019
He has since racked up some $500 worth of bitcoin, all before the stock market even opened.
Meanwhile, his precious commodity gold has been almost as volatile as bitcoin. The gold price rose above the psychologically important 1,400 level at the beginning of the week only to fall back below it. Gold just lost more of its luster.
After U.S. jobs data came in better than economists were expecting for June, investors found less of a reason to invest in the safe haven and the gold price dropped. Schiff is still crying recession and he expects the Fed to cut rates, which he says would “boost inflation.”
Gold feeling the heat after the June jobs report came in stronger than expected pic.twitter.com/OlCybeZgqv
— CNBC Futures Now (@CNBCFuturesNow) July 5, 2019
Mark Mobius on Bitcoin
Gold bulls are skeptical about bitcoin because it threatens to take market share away from the precious metal, not to mention the coveted title as a store of value. Wall Street veteran Mark Mobius is another gold investor. He told Bloomberg that he “loves gold,” particularly in a market in which interest rates are falling.
Like Schiff, Mobius is open to owning some digital gold, but he remains a no-coiner for the moment, telling Bloomberg about his reservations. But Mobius, who is at the helm of Mobius Capital partners, is stuck on the fact that bitcoin hasn’t made its way into the mainstream yet and isn’t “widely used,” citing the common misconception –
“…except in a lot of illicit activity, a lot of the drug transactions and things like that are taking place with cryptocurrencies.”
Regulators around the world are cracking down on illegal activity surrounding crypto with a focus on anti-money laundering policies. Mobius is not a buyer – yet – but he’s not ruling it out, either.
“At the end of the day, there are many people who do believe in it. And if it continues and grows, then I would probably have to be a buyer and be involved in this.”
With the upcoming launch of regulated bitcoin futures exchange Bakkt, price discovery for bitcoin will improve, which should appease Mobius. Two major gold bugs are warming up to bitcoin. Hope springs eternal for economist and bitcoin hater Nouriel Roubini.
The first half of 2019 brought goods times for cryptos in general, and particularly Binance coin. XRP, though, eked out relatively meager gains.
The third largest cryptocurrency by market capitalization closed at $0.396411 on June 30, representing 12.45 percent gains on the 2019 opening price of $0.352512 seen on Jan. 1, according to data source CoinMarketCap.
While not terrible by any normal standards, the double-digit price gain pales in comparison to binance coin’s (BNB) staggering 424-percent rise.
The seventh-largest cryptocurrency by market value, BNB is the exchange’s native token used for various purposes including paying trading fees on Binance’s platforms. Its price rose from $6.19 on Jan. 1 and closed at $32.44 on June 30 to become the best performing top-10 cryptocurrency H1 2019.
BNB is currently trading at $33.50, having hit a record high of $39.52 on June 22. Apart from its role in the growing trading activity on Binance, BNB likely benefited from token sale platform Binance Launchpad, which required participants to purchase the exchange coin.
Meanwhile, other top-10 cryptocurrencies – excluding stablecoin tether – also outperformed XRP by leaps and bounds in the first six months.
Litecoin rallied 301 percent in the first six months as markets likely priced in an impending miners’ reward halving, due in August.
Bitcoin, the top cryptocurrency, jumped 188 percent and looks set to rise even further ahead of its own halving, scheduled for May 2020. Further, the narrative is becoming entrenched in the markets that Facebook’s fiat and government bond-backed Libra cryptocurrency is net-positive for bitcoin, an anti-establishment asset.
While the $7,000 rise in bitcoin boded well for most cryptocurrencies, it did little good for XRP. Its dull performance looks even more confounding if we take into account the bullish technical developments on XRP’s chart.
To start with, XRP’s 50-day moving average (MA) crossed above the 200-day moving average at the end of May, confirming a golden crossover – a long-term bull market indicator. The 100- and 200-day MAs also produced a bullish crossover in early June.
Buyers, however, repeatedly failed to keep prices above $0.47 as seen in the chart below.
The situation looked hopeful when XRP breached a contracting triangle pattern on the higher side on June 22. The breakout, however, was short-lived, and prices fell 12 percent on June 27.
The failed breakout invited more selling and the cryptocurrency fell to $0.37 earlier today, the lowest level since May 24.
Looking forward, a convincing break above the June 26 high of $0.50 is needed to confirm a long-term bearish-to-bullish trend change.
Disclosure: The author holds no cryptocurrency at the time of writing
The knock was loud, the breaking of the door, louder. The bulls of the bitcoin market broke into a joke shop, which was lying deserted for the last three months, with $156 million worth of digital money.
In other news, the price of Dogecoin (DOGE) experienced a double-digit percentage gain on Friday to reclaim a nine-month high. The meme cryptocurrency established an intraday high of $0.00499, up more than 60 percent from the market open today. The move upside pushed the Dogecoin market capitalization from $382.74 million to as high as $537.42 million. At its highest, the cap was $1.67 billion.
The Dogecoin pairs across the cryptocurrency exchanges reported a 24-hour adjusted volume of $143.343 million, data on Messari.io showed. On a “Real 10” scale, a metric that removes fake trading volume, the DOGE-enabled instruments noted a mere $36.724 million worth of trading activity in the previous 24 hours.
Binance Integration, Bitcoin Intraday Weakness
The latest upside push in Dogecoin borrowed bullish sentiments from Binance, the world’s largest cryptocurrency exchange by volume. The Malta-based firm announce
d today that it would open trading for five DOGE pairs on its platform, marking the cryptocurrency’s first foray into the global cryptocurrency platform.
— Binance (@binance) July 5, 2019
“Users can now start depositing DOGE in preparation for trading,” Binance stated.
The listing appears to have worked wonderfully for a cryptocurrency, which, in the past three months, was away from the limelight as bitcoin mousetrapped a more substantial portion of the crypto market. That showed in the intraday performance of DOGE/BTC. The pair appreciated by as much as 56 percent on Friday — right after the Binance made the listing announcement — to close above the May 19 high of 44 sats.
As of 14:10 UTC, the Dogecoin-to-bitcoin exchange rate was 35 sats. Earlier in London morning, the pair underwent a significant downside correction from the local top of 44 sats, which hinted traders (or bulls) exiting the market (or joke shop) for a long-term bullish bitcoin. The market cap simultaneously followed with a drop to $467.28 million.
On a technical front, the Dogecoin just came down upon testing the upper trendline of what appears like a Falling Wedge (it is a bullish pattern). Most likely, the joke coin would retest the trendline again while hoping for a breakout towards the next resistance, which is near the 48 sats level.
Meanwhile, such bulls, much wow, anyway.
The deputy governor of the Bank of Japan, Masayoshi Amamiya, has warned that the creation of crypto by central banks could have a negative impact on economies, Reuters reports.
According to Amamiya, Central Bank Digital Currencies (CBDCs) had the potential to take away the credit channels of commercial banks if they managed to replace private deposits. Consequently, this would impact the economy negatively since commercial banks would be rendered unable to borrow and by extension, lend:
If central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy.
Perils of forcing central bank crypto on the people
BoJ’s deputy governor also criticized the idea that the effectiveness of policies of pursuing negative interest rates could be enhanced by the issuance of CBDCs. Per Amamiya, issuing CBDCs and then slapping negative interest rates on them would lead to individuals and businesses opting for cash to avoid the cost charged on holding CBDCs.
While central banks still had the option of getting rid of cash in order to ensure this, it would not be ideal for the citizenry.
Additionally, Amamiya also warned firms that are planning to unveil cryptocurrencies must comply with anti-money laundering regulations. In his remarks, Amamiya singled out Facebook saying that because of the huge potential user base across the globe, its cryptocurrency could have a big impact around the world.
BoJ not alone
The wary approach adopted towards Facebook’s cryptocurrency Libra is not limited to the Bank of Japan. Days after Libra was announced, the governor of the Bank of France Villeroy de Galhau warned that the digital currency would increase money laundering risks due to the relative anonymity offered. Consequently, Galhau stated that Libra must follow anti-money laundering regulations.
Additionally, Galhau indicated that if Facebook intended to provide banking services like traditional financial institutions then it would have to be regulated like banks.
It’s already begun. France is calling for a central bank review of Libra https://t.co/Nc5iRm2pw2
— Joe Weisenthal (@TheStalwart) June 18, 2019
Not many likes for Facebook crypto among central bankers
A similar sentiment was echoed by the central bank of central banks, the Bank for International Settlements (BIS) shortly after Libra was announced. At the time, BIS warned that Libra could negatively impact the international banking system by undermining its stability.
Additionally, the BIS cautioned that digital currencies such as Libra which had the potential of attracting billions of users across the world could reduce competition while introducing data privacy issues.
The Bank of England has also weighed in on Libra with its governor Mark Carney stating that Facebook’s crypto will be subjected to the ‘highest standards of regulation’. While adding that regulating Libra would require the coordinated efforts of various international bodies such as the IMF, the BIS and the Group of Seven, Carney said that their approach would involve keeping an ‘open mind, but not open door’.
Michael Arrington-backed crypto loans provider Nexo has announced that it will accept the gram token from messaging app firm Telegram as collateral.
Nexo told CoinDesk that, following the first public sale of gram tokens through the Liquid exchange platform, kicking off on July 10, it is allowing customers to use grams as backing for its instant credit lines and credit card.
The limited gram sale – the first open to the general public – is being made via Gram Asia, a Korean firm claiming to be the largest holder of gram token – obtained through Telegram’s private, multi-stage ICO in 2018. The token sale reaped an astonishing $1.7 billion in two phases – the highest raised via an ICO at the time.
Telegram is not associated with the gram offering, Liquid has told CoinDesk.
The ICO funding is being used to develop the Telegram Open Network (TON), an ambitious blockchain project aimed to decentralize multiple facets of digital communication, ranging from file sharing to browsing to transactions.
Should grams go see a wider public offering, the token has “the potential to become one of the largest cryptocurrencies by market cap,” according to Nexo. The full launch of the TON network is also likely to boost the market for grams, it said.
Nexo offers, its website says, insured accounts that provide automated and “instant” approvals for loans in over 45 fiat currencies. Crypto holders can also earn “up to 8 percent” interest on their assets.
The firm launched in April 2018, and is notably backed and advised by TechCrunch founder Michael Arrington, who confirmed to CoinDesk at the time that he holds a stake in the startup.
The Liquid exchange indicates that gram tokens will go on sale at a price of $4 each. Both U.S. dollars and the USDC stablecoin may be used for purchases. The token will not be made available to investors immediately, however. New holders will have to wait until the TON launch, at which point tokens will be paid out in four tranches over 18 months.
Telegram in pocket image via Shutterstock
Bitcoin does not need to do anything to become a global reserve currency until Mr. Donald Trump is in command at the White House.That is what Jameson Lopp of CASA said on Friday in response to the President Trump’s call to manipulate the value of the US dollar. The chief technology officer stated that financial systems are inevitably failing under the political influence of “fickle fallible humans.” And as they keep eroding the system from the inside, people would be left with no choice but to look for financial backups that are entirely independent of their decisions.“There’s one perspective that Bitcoin need not do anything else [in order to] become a global reserve currency: all it needs to do is nothing as it watches other systems inevitably fail under the follies of fickle fallible humans,” Lopp said.There’s one perspective that Bitcoin need not do anything else in order to become a global reserve currency: all it needs to do is nothing as it watches other systems inevitably fail under the follies of fickle fallible humans. https://t.co/B2xCE5t0ME— Jameson Lopp (@lopp) July 3, 2019Toying with GreenbackTrump on Wednesday accused the Europe and China of playing a “big currency manipulation game.” He suggested that the United States should match up to them, a remark many analysts assumed was the president’s call to weaken the dollar. The greenback reacted negatively to the statement. On the day of the tweet, the US dollar index, which measures it against a basket of major currencies, slipped into the red.Mark McCormick, a forex strategist at TD Securities, believes that Trump is saying what is going to happen thanks to the Federal Reserve’s likelihood of cutting interest rates.“It’s pretty clear the currency is definitely a focus … you have some new Fed nominees which lean on the dovish side, you have the Fed ready to cut rates, you have a slowing U.S. economy,” he told CNBC. “There’s a period here where the currency is going to weaken on these things.”Anthony Doyle of Fidelity International, meanwhile, believes that weakening the dollar is the Federal Reserve’s “only game” if it wants to protect the US economy. He said:“Generating inflationary pressures, generating competitiveness through a lower currency is one tool that central banks can use to support their economies.”Bitcoin BullsThe statements appeared to validate the cases against the centralized economies made by the bitcoin community. Over the last decade, the fan club has projected the cryptocurrency as the marriage of Gold’s scarcity and internet money’s speed. Many of them, like Lopp, still believe that bitcoin, a non-sovereign entity, is on its path to becoming a global reserve asset, much like gold.Market analyst Alex Krüger, for instance, places “macroeconomic narratives” such as a weaker dollar among the catalysts that could propel the bitcoin adoption higher. Similar support of a bullish bitcoin comes from economist Tyler Cowen who recently flipped his negative views in favor of the cryptocurrency. He wrote in his Bloomberg opinion post:“One final possible explanation for the resurgence of Bitcoin: Populism is spreading, the Middle East is not calming down, and the world is not solving its geopolitical problems. To the extent Bitcoin is a general hedge, much like gold, the conditions for its value seem to be favoring a high future demand for portfolio insurance. Even a small percentage of global wealth put into Bitcoin can sustain a high Bitcoin price.”It seems crypto is not just a passing fancy: https://t.co/hO8hmoPeRc— tylercowen (@tylercowen) June 28, 2019Nevertheless, there are also many who do not believe in any upside projections confirmed by the bitcoin bulls. Renowned gold bull Peter Schiff is one among them. Though a long time critic of the Federal Reserve’s dovish policies, Schiff believes the solution to the global finance problem lies in gold, not bitcoin.“How low would Bitcoin’s price have to fall for FOMO to become FOLE; “fear of losing everything,” causing hodlers to finally throw in the towel? Or are hodlers so convinced they are right, that they will bravely go down with the ship, and ride Bitcoin all the way down to zero,” he said.
Bitcoin cratered on Friday, confirming that its interim downtrend sentiment is far from over.
The world’s largest cryptocurrency by market cap established an intraday low of $10,761.80, down 3.38 percent from the Thursday Asian session open. The move downhill brought bitcoin’s downside correction from 2019 top to 22.40 percent. At the same time, the cryptocurrency’s market capitalization dipped to approx $193.84 billion.
On the volume front, the bitcoin-enabled pairs across all the cryptocurrency exchanges posted more than $25 billion worth of trading activity in the past 24 hours. Nevertheless, the Real 10 Volume, which allegedly removes the fraudulent data off the volume statistics, reported just $1.98 billion worth of trades.
Interim Downtrend Confirmed
Bitcoin had rallied to a peak level of $13,868.44 on June 27 afternoon, its highest price since January 2018. It then dropped to $9,651 in the next five days, which brought its net downside correction to 30.41 percent on July 2 morning. In the sessions that came later, bitcoin attempted a brief upside recovery of circa 25 percent to close above the $12,000 level on June 4 yesterday.
The price action throughout left imprints that indicated a downtrend action. As shown in the Coinbase chart above, the cryptocurrency formed more than two lower lows and lower highs, eventually making a constellation of a downward channel (indicated via purple).
That said, one could expect bitcoin to test the $10,450 level for a potential pullback. If that level fails, then the same pressure falls on the next near the $9,677 area. But the most crucial pullback level, as I believe, is the one near $8,954. This area has a history of accumulation, with the latest being between June 16 and 20. The same has served as a decent resistance level during the upside action in May.
The Bull Case
The Coinbase 4H chart above shows bitcoin also hinting to complete an inverse head and shoulder pattern, which is typically bullish. In the best case scenario, traders could start accumulating the cryptocurrency at any given support targets. The move would prompt bitcoin to retest the neckline for a breakout. If that happens, the bitcoin price would likely rise by as much as $2,485 — the height of the head and shoulder — from the point of breakout.
That would take the bitcoin price, at least, back to the local top of $13,868.44.
Click here for a real-time bitcoin price chart.
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The popular wallet service Electrum is soon to add support for bitcoin’s lightning network.
Electrum’s founder Thomas Voegtlin told CoinDesk from the BIP001 blockchain event in Odessa, Ukraine, that work on the solution for sending lightning transactions with the Electrum wallet is now close to its official release.
While he declined to reveal a specific release date, Voegtlin said:
“We’ve been doing this work for about a year in a separate branch [on GitHub] and we’ve reached the point when we are ready to merge it with our master branch. This is going to happen in the coming weeks until the end of July, and it means that the next major release will have lightning support.”
At the event, Voegtlin showed CoinDesk a test version of the wallet on his mobile phone (see image below).
The lightning network is an in-development “layer 2” scaling technology that is aimed to enable faster payments, lower fees and greater transaction throughput than the bitcoin network can provide directly. There are several iterations in development by different projects.
Voegtlin noted, though, that Electrum chose not to integrate with the existing lightning clients, and instead developed its own implementation.
“We want to give users control over their funds,” he said.
The product will be similar to that of Eclair, the lightning wallet, which itself uses Electrum servers to interact with the bitcoin network.
Electrum’s lightning implementation will not use Electrum servers, however, as the wallet does for bitcoin. Voegtlin explained that it will use lightning network’s gossip protocol – tech that enables peer-to-peer communication based on the way epidemics spread through a population.
Lightning image via Shutterstock; Thomas Voegtlin via Anna Baydakova for CoinDesk
Monero developers have revealed nine security flaws, and one of them can be exploited to steal XMR from cryptocurrency exchanges.
Two critical Monero bugs discovered
“By mining a specially crafted block, that still passes daemon verification an attacker can create a miner transaction that appears to the wallet to include sum of XMR picked by the attacker. It is our belief that this can be exploited to steal money from exchanges,” a developer with the pseudoname “cutcoin” stated in the HackerOne report.
The developers have also discovered five DoS attack vectors, and they labeled one of them as a critical issue.
Another security flaw was discovered concerning CryptoNote, an application layer used in the Monero ecosystem to increase the privacy of the transactions.
You’re right, $BTC isn’t anonymous…
…that’s where the #cryptonote protocol comes in. It’s P2P code is being re-engineered for speed and scale by the #RyoCurrency dev team that brought fair #Monero mining to the masses with xmr-stak software. 😏 https://t.co/cPcSQAg4eW
— Ryo_Currency (@RyocurrencyO) July 4, 2019
If hackers have managed to exploit this bug, they would be able to take Monero nodes down using a method that includes the malicious request of large amounts of blockchain data from the cryptocurrency’s network.
“If you have quite a big blockchain (with long history like Monero […]), then you can push a protocol request that will call all of its blocks from another node, which could be hundreds of thousands of blocks. Preparing such a response can take a lot of resources. Eventually, the OS might kill it due to the huge memory consumptions, which is typical of Linux systems,” the vulnerability’s discoverer, Andrey Sabelnikov, told Hard Fork.
According to Sabelnikov, other crypto projects who are utilizing CryptoNote could be affected by the security flaw.
Another issue developers have found is the leaking of uninitialized memory. According to the report, uninitialized memory is never literally uninitialized. Therefore, it contains sensitive data, such as cryptographic and private information.
Flaws were not exploited
The developers reported the majority of the flaws approximately four months ago with eight vulnerabilities being patched in the meantime and the ninth one remaining undisclosed.
While two of the nine flaws were labeled as critical by the developers, it should be noted that these are all “proof of concepts” and there’s no sign that anyone has managed to exploit the bugs.
Last year, CCN reported that Monero developers have successfully patched a bug in September that could have put both cryptocurrency exchanges and merchants at risk.
By sending a series of payments to a single stealth address belonging to a cryptocurrency exchange or merchant and exploiting a bug in the Monero wallet software, hackers would have been able to “burn” cryptocurrency exchange deposits.
However, this issue was also a “proof of concept” and never had any real consequences.