📰 Bitcoin Weekly News Review: Market Is Experiencing "Crypto Winter" Without A Possibility To Recover? (Nov. 12-18, 2018)
The market has experienced a significant decline, while Bitcoin's fork BCH has been forked with 2 competing chains, and the hash rate war may well end in crypto winter. Meanwhile, U.S. Congressman wants to "eliminate" SEC jurisdiction over the crypto industry, and one of the CNBC people advises to buy XRP ironically.
Cryptocurrency market
Negative expectations regarding the cryptocurrency market turned out to be true: BTC price suffered a significant drop between $5300-$5400 as weekly low, pulling all other cryptocurrencies down.
According to CoinMarketCap.com, the market capitalization of all digital assets declined by $15 billion over 24 hours on Wednesday. As 7-days result, Bitcoin Cash ABC [IOU] (BCHABC) lost -39.51% of past market value, Bitcoin Cash SV [IOU] (BCHSV) is currently trading at 16.02% higher, while the price of a native asset (BCH) dropped to $381 (-29,94%). What's for the overall picture, cryptocurrency markets fell below $200 billion, and, much deeper than this happened before ( $185 210 369 228).
Who Is Winning? Bitcoin Cash After Hard Fork
The recent Bitcoin Cash hard fork resulted in 2 competing chains, Bitcoin Cash ABC (BCH ABC) and Bitcoin Cash SV (BCH SV). This situation quickly received the name "hash rate war", due to the fact that miners' control over the blockchain is still not stable. As reported by one of the centres of market activity, BitMEX Research, SV miners have estimated gross losses of around $397,000, compared to ABC miners on $365,000 of losses. But, according to the latest data, both sides have $1.2 million in losses since the split.
Other actual data can be found here.
Bloomberg Predict Bitcoin Has Further to Fall
Researchers from the Bloomberg Intelligence group suggest that the price of Bitcoin should continue to fall after the recent decline of more than 10% [published 2 days ago]. In this article, the author refers to such a concept as crypto winter, that is, a market recession. Now it is not entirely clear how this winter can behave, it will probably form long plateaus, like this autumn, or these plateaus will be interspersed with sharp declines, forcing investors to dump their savings, just as it happened several days ago.
The researchers themselves suggested quite exact numbers. So, the price of Bitcoin could fall to $1,500 (70% decrease from current levels), according to their opinion. The strong bearish sentiments, just only confirmed by the fork, as well as weak demand for mining equipment (as reported by Nvidia) played as arguments.
Benoit Coeure (European Central Bank): "Bitcoin Is The Evil Spawn Of The Financial Crisis"
Is it a charge or a compliment? European Central Bank Executive Board member Benoit Coeure during his speech at Bank for International Settlements in Basel mentioned several facts about Bitcoin and its creator Satoshi Nakamoto:
“Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about U.K. banks’ bailout. In more ways than one, Bitcoin is the evil spawn of the financial crisis.”
then summed up:
“Bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea,”
Indeed, Bitcoin appeared in 2008, just at the peak of the financial crisis. But, is this an evidence? There are many theories that represent cryptocurrency as some resistance to the financial crisis. They're based on the idea of free access to barter, a more transparent exchange in the market, and so on, as described. Of course, while crypto falls, these theories are gradually losing popularity.
France Is Considering Taxation For Cryptocurrency
Fabrice Heuvrard, an auditor working with the French government to establish cryptocurrency taxation, reported that regulators are now considering such a measure. Details of the tax rate and how it is formed are not yet known, although there are proposals that investments received during the ICO process should be taxed at the 20% rate.
“The (cryptocurrency) community is ready to pay taxes as long as they are not confiscatory.”
The complete version of tax rules will be presented by the French government already in early 2019. Some of the crypto community members are confident that there is a chance that this policy will include preferential taxes on digital investments. At the same time, for individual investors who have already lost up to 90% of crypto savings in dollar terms, the additional taxation can become quite important.
IBM: Central Bank Digital Currencies Will Reduce Risks
Stanley Yong, CTO of IBM thinks that central bank digital currencies (CBDC) will help reduce the risks of financial crisis. As the argument, Young mentions the situation of 2008, when the lack of confidence in the “delivery versus payment” mechanisms was one of the associated negative factors.
Delivery Versus Payment, or DVP, involves simultaneous settlements between parties to transactions in cash and securities. This is a standard of settlements on the stock markets of all developed countries and also an opportunity to show that the company does not assume the risks of other participants.
The September IBM research report also revealed the idea that a central bank digital currency (CBDC) could be backed by these financial institutions. Yong himself says that the combination of technologies, including blockchain, could have prevented the financial risks that were discovered almost 10 years ago, and CDBC will help reduce the "fragmentation of the financial market".
CIMB Group (Malaysia) Has Entered Into Partnership With Ripple
CIMB Group, ASEAN’s fifth-largest bank based in Malaysia, has entered into a strategic partnership with Ripple to enable instant cross-border payments across South Asian countries. Also, by refusing the current SpeedSend payment system, the organization plans to strengthen transfer corridors such as Australia, USA, UK and Hong Kong.
"CIMB’s network already spans 15 countries, nearly 800 branches and offers Speedsend — one of the best solutions in the ASEAN region. Now, by integrating Ripple’s blockchain technology, they will enable their customers to send vital funds to family, friends and loved ones more efficiently. With its focus on innovation, CIMB will continue to be a dominant force in the region for years to come.”
-Brad Garlinghouse, Ripple CEO
Now 39% of the market of cross-border payments market is concentrated in the ASEAN region. The total amount of cross-border payments today is 27 trillion dollars, and in 2018-2026 this area may add another 20 trillion dollars. Definitely, blockchain use will make the global settlements channels more accessible. However, the bank didn't say which of the Ripple's instruments they will use.
Scam Exchange PureBit Will Return 50% Of Stolen Funds To Victims
The heads of the South Korean startup, which attracted $2.7 million during ICO, did what's called exit scam - they just fell into oblivion with the users' money. But it did not last for so long.
Fraudsters changed their minds to throw investors and promised to return all funds. All due to the fact that law enforcement agencies have paid attention to this situation, and Upbit exchange instantly blocked the accounts of criminals.
They published a message through the South Korean portal BlockchainROK, in which they apologized to all affected users and guaranteed to pay damages:
🇰🇷 - PureBit scammer apologizes and says he/she will return 50% of funds stolen to victims if they prove their addresses on EtherScan.
Korean Cryptocurrency & Blockchain News (@BlockchainROK) November 13, 2018
Oddly enough, the perpetrator has already partially refunded several victims.
This is the address: 0x7DF1BD58e8Fd49803E43987787adFecB4A0A086C pic.twitter.com/btAP8ubcJw
Representatives of the exchange have already partially returned the money to some users and promised to return all other funds. The project itself started with ICO, which attracted a substantial amount of funds for the implementation of the platform. But, on November 9, PureBit closed its website, said goodbye to its investors and removed all users from the group in KakaoTalk messenger.
Bitmain Denied Rumors Of Jihan Wu Leaving The Board Of Directors
This week, the media space began to spread rumors about the possible exit of Jihan Wu from the Bitmain team. Bitmain is currently the largest manufacturer of mining equipment, so changes in its board of directors would be key to company policies. But, these rumors have not been confirmed.
Several theories were voiced at once, one of which is that Wu took over the position of Bitmain supervisor and lost his right to vote as the member of the board of directors, the other concerned the relationship between him and Bitmain co-founder Micree Zhan, which was described as a confrontation.
However, some changes did take place:
“As is standard listing practice, Bitmain is restructuring its board and group structure, to ensure it meets regulatory requirements on its road to IPO.
This is to simplify the board structure to facilitate its management. There have been no board departures and co-founder Jihan Wu will continue to lead the company as co-chair, together with co-chief executive officer, Micree Zhan.”
Now, the firm is planning a public offering (IPO).
China vs Bitcoin: Cryptocurrency Hashrate Fell By 20%
Auditors from the Chinese government have begun to investigate large mining farms in the Chinese provinces of Xinjiang and Guizhou. In these regions, miners have been threatened with power cuts, so they completely stopped working. This significantly affected the Bitcoin network, which caused the hash rate to drop by 20%.
Not so long time ago, mining farms signed agreements with the Chinese government on new work rules, including compliance with legislative measures, such as tax and commercial registration, social security, and so on. Despite the fact that the parties entered into the contract, on 05.11.2018, the electricity on the farms was turned off without notice, after which an inspection has been carried out.
Mining Ethereum Using GPU Is No Longer Profitable
According to the data provided by Susquehanna, the revenue from GPU Ethereum mining reached $0 this month. At the peak values, mining did the greatest profit, but now the incomes of network participants are barely estimated at $0. Manufacturers of mining equipment also experienced changes (NVIDIA):
"We estimate very little revenue from crypto-related GPU sales in the quarter, consistent with management's prior commentary that they were including no contribution from crypto in their C3Q18 outlook.”
The experts explained the unprofitability of mining activity not only by increasing competition and complexity but also by the significant Antminer dominance, as well as a 70% fall in prices, that, in general, is no secret to anyone.
Other news
→ Ran NeuNer (Known By CNBC) Is Trolling Users (Or Not Trolling) By Advising Them To Buy XRP
These hash wars highlight why everyone should dump BTC and BCH and just put all their money into XRP!
Ran NeuNer (@cryptomanran) November 17, 2018
→ US ETF Doesn't Exist, ETN Is Not Interesting To Anyone, So Maybe ETP Will Work?
According to a Financial Times report, the SIX Swiss Exchange is launching the exchange-traded product (ETP), which looks like mixed cryptocurrency portfolio (based on BTC, ETH, BCH, XRP and LTC).
→ XRP Is Officially Listed On Coinbase Custody
XRP cryptocurrency is now supported by Coinbase Custody, which provides institutional-level clients with the ability to safely store large amounts of cryptocurrency.
→ Ohio Republican Warren Davidson Wants To Eliminate The SES’s Jurisdiction Over The Industry
“A spokesman for Davidson confirmed that the Ohio Republican plans to introduce a bill that would allow ICOs to sidestep securities law, including at the state level, and eliminate the SEC’s jurisdiction over the industry by treating the currencies as products, rather than securities.”
→ Michael Parsons (Cardano Foundation) Resigns
Michael Parsons, Chairman of the Foundation Council of the Cardano Foundation, leaves the team in response to a petition signed by more than 6,000 members of the Cardano community in early October 2018.
