ICOs Raked in $13 Billion Despite 90% ETH Price Drop, New Research Finds

ICOs made almost $13 billion in profits from their token sales despite the 2018 cryptocurrency bear market, new research from BitMEX reveals.


BitMEX: ICO Issuers ‘Gave Themselves $24 Billion’

Published January 16, the third instalment of the trading platform’s dedicated series on ICO statistics also suggests ICO teams “gave to themselves” tokens worth over $24 billion at the time of issuance.

“Today this figure has fallen to around US$5 billion, with the difference primarily being caused by a fall in the market value of the tokens, alongside ($1.5 billion) of transfers away from team address clusters (Possibly disposals),” BitMEX summarizes.

In total, combined with findings from the second installment in October 2018, a figure of $12.8 billion is now circulating as the total profit wrought from the ICO craze of the past two years.

While some teams have since launched products and demonstrated application of funds, many have yet to do so, staying dormant since their token sales.

As Bitcoinist reported, ICOs that raised hundreds of millions of dollars each faced a highly volatile market over the last twelve months with over 70 percent now underwater.

Others have since fallen foul of the law, with Paragon and Airfox both required to pay back huge sums to investors along with fines for flouting US securities regulations.

2020 ICO Renaissance?

Responding to the BitMEX findings, Blockstream CEO and Hashcash inventor Adam Back thus appeared unsurprised.

“[W]hen people start startups, they take usually a paycut (versus a) big (company), so modest pay, relatively,” he commented on Twitter.

[A]and take illiquid stock, that is not tradeable (sic) until they achieve technology and market success. [A]m I reading it right that ICOs just dipped into investor capital (and) gave it to themselves?

BitMEX CEO Arthur Hayes was also palpably nonplussed.

“When you create poo poo out of thin air, gravity is a bitch,” he tweeted.

Ethereum (ETH) 00, the major network used to issue ICO tokens, currently trades around $120, equating to a drop of over 90 percent versus its all-time highs.

Earlier this month, Hayes suggested that both ETH and the ICO market could see a resurgence within the next eighteen months.

What do you think about BitMEX’s new findings? Let us know in the comments below!


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Source: Blockchain

XRP Overtakes Ethereum Despite Looming ‘Constantinople’ Upgrade

Ethereum constantinople

XRP has reclaimed the position of the second largest cryptocurrency by market cap from ETH just days before Ethereum’s ‘Constantinople’ hard-fork upgrade. 


Pre-Fork Drop

On January 16th, Ethereum is scheduled to undergo a network-wide system update called ‘Constantinople’. Among other things, the implementation of the upgrade will reduce the block reward from 3 ETH/block to 2 ETH/block.

Days before the event, however, Ethereum’s (ETH) 00 price experienced a notable decline.

In a matter of minutes, ETH price dropped by about 8 percent.

The movement caused ETH to fall behind Ripple (XRP), which reclaimed its spot as the second largest cryptocurrency by means of market capitalization, less than two weeks after Ethereum regained the number two spot from XRP.

In fact, the two have been neck and neck over the past few months in cryptocurrency market cap rankings.

XRP 00 also experienced a decrease around the same time, but the cryptocurrency experienced a relatively smaller loss of 2.5 percent against the USD.

Ethereum’s ‘Constantinople’

Constantinople is a system upgrade scheduled for implementation at block 7,080,000. Given the current average block time, the event should take place on January 16th, 2019.

One of the most discussed changes that the upgrade will cause is the reduction of block reward from the current 3 ETH/block to 2 ETH/block. This is also referred to as the “thirdening.” It’s the second time Ethereum’s block rewards have been reduced.

The first one was called “Byzantium” and it took place on October 16th, 2017. Back then, ETH surged by about 6 percent during the day, followed by the cryptocurrency’s late 2017 rally to an all-time high of about $1,400.

In total, the upgrade will integrate 5 Ethereum Improvement Proposals (EIPs), which are geared toward tackling cost, speed, functionality, and mining issues.

Support For ‘Constantinople’

Several cryptocurrency exchanges have announced their support for the upcoming network upgrade.

Binance, HitBTC, Huobi, Bittrex, OKEx, CEX.IO, Cryptopia, and Poloniex, have all announced that they will support the Constantinople hard-fork.

Most of them advise users to give sufficient time for their deposits to be processed prior to the upgrade.

At the time of writing this, Gemini, Coinbase, and Bitfinex, haven’t yet declared their support for the upgrade.

What do you think about Constantinople and its impact on Ethereum? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock; TradingView

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Source: Blockchain

Russia Planning $10B Bitcoin Investment, Insists Kremlin Economist

Russia cryptocurrency

Russian economist, Vladislav Ginko, says Russia is looking to invest $10 billion in Bitcoin as the State Duma has put cryptocurrency legislation high on the agenda for 2019.


Rumored $10 Billion Bitcoin Investment

Ginko, an economist with ties to the Kremlin, says the Russian government will convert some of its USD reserves into Bitcoin, a move that could start as early as February.

Last week, Bitcoinist first reported on the government’s rumored plans to ditch the Dollar as a way of circumventing U.S. sanctions.

Vladislav Ginko

Now, according to The Telegraph, the Kremlin plans to invest as much as $10 billion into Bitcoin, citing Ginko, who added:

[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars.

“These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin.

The economist also believes cryptocurrency-related activity now comprises as much as 8 percent of the country’s GDP. What’s more, Ginko expects Russia to also create an intermediary ‘Bitruble,’ which it will trade for bitcoin.

Russian Efforts

“The proposal that I understand is on the desk of the finance minister at the moment is to create some sort of intermediary cryptocurrency,” commented Mati Greenspan, Senior Market Analyst at eToro, in reaction to the news.

We know that Vladimir Putin is a big advocate of blockchain technology. Obviously he doesn’t like the sanctions that have been placed on him, and he’s already said that these types of sanctions are going to lead to de-dollarization. This is more or less the direction the Russian government is going.

Cryptocurrency Regulations High on the Agenda

Greenspan also adds that “the only thing holding the country back is the legal framework to do so.”

Interestingly, fuelling the aforementioned rumors are new reports that Russian lawmakers are looking to prioritize creating a legal foundation for the cryptocurrency market this year.

According to Alexander Zhukov, the First Deputy Chairman of the State Duma, cryptocurrency regulations are a primary focus of legislative work for 2019. An excerpt from a recent article on the official State Duma website reads:

Among the priorities of parliamentary work in the spring session are issues of the development of the digital economy, bills aimed at improving the anti-corruption legislation, as well as amendments that will strengthen the fight against financial scammers.

Apart from being one of the focus points for the Spring Session of the State Duma, matters relating to the cryptocurrency industry will also receive special attention.

According to Zhukov, the Chairman of the State Duma, Vyacheslav Volodin has mandated that special attention is paid to draft laws towards the development of the digital economy.

Russia’s Cryptocurrency Law May Finally Happen in 2019

Despite several efforts, the country’s legislature was unable to pass any cryptocurrency legislation in 2018. Even with the apparent urging of President Vladimir Putin, the State Duma didn’t pass the “On Digital Financial Assets” bill.

With these new declarations from high-ranking members of the Russian Parliament, the country might finally be on the path of obtaining clear-cut regulations for the industry. Speaking during the opening plenary meeting, Volodin urged lawmakers to push beyond “legislative blockages” and focus on passing and enforcing laws.

What impact do you think a $10 billion investment by Russia would have on the price of Bitcoin? Let us know your thoughts in the comments below.


Image courtesy of Duma.gov.ru, Shutterstock, Youtube

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Source: Blockchain

Fred Wilson: 2019 Will Find the Bottom and ‘Slowly’ Enter a Bull-Run

Fred Wilson Union Square Vetures

Fred Wilson, the co-founder of Union Square Ventures, holds that 2019 will see the cryptocurrency market bottom out and ‘slowly’ enter a new bull run. However, he’s also concerned by actions of ‘misguided’ regulators. 


2019: Finding the Bottom

Venture capitalist and co-founder of investment firm Union Square Ventures, has laid down his predictions on the overall state of the cryptocurrency market in 2019.

The investor believes that we are currently in the process of bottoming out. However, he thinks that this would take much of 2019 but it will be followed by “some bullish runs.”

I expect we will see some bullish runs, followed by selling pressures taking us back to retest the lows. I think this bottoming out process will end sometime in 2019 and we will slowly enter a new bullish phase in crypto.

Unlike others who’ve based their positive predictions on catalysts such as further market adoption, institutional money entering the market, infrastructure, and so forth, Wilson sees the premise of a new bullish run in the face of the results of promises made back in 2017.

I think the catalyst for the next bullish phase will come as the result of some of the many promises made in 2017 coming to fruition in 2019 […] I think we will see a number of “next gen” smart contract platforms ship and challenge Ethereum for leadership in this super important area of the crypto sector.

Another area where Wilson thinks 2019 will bring ‘meaningful progress’ and further adoption is stablecoins. He’s not alone on the matter.

Bitcoinist reported earlier in November that CoinJar’s co-founder Asher Tan also believes in the potential of stablecoins to solve the problem of volatility in the cryptocurrency space.

Regulatory Concerns

The venture capitalist also shares that there will be pressure on the cryptocurrency industry, in general. According to him, it will stem from ‘misguided regulators’.

The area I am most concerned about are actions brought by misguided regulators who will take aim at high quality projects and harm them.

Back in October, industry proponent Jeremy Allaire, CEO of investment application Circle, called for globally coordinated cryptocurrency regulations. At the same time, the Chairman of the US Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo urged regulators to apply a “do no harm” approach to cryptocurrency legislation.

Last but not least, Wilson thinks that scams, hacks, and overall failures are going to remain a “drag on the sector.” However, he also holds that this is normal and ‘always the case’ with emerging tech.

What do you think of Fred Wilson’s prediction of the cryptocurrency industry’s condition in 2019? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock, Wikipedia.org

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Source: Blockchain

Vitalik Buterin: Bitcoin is ‘Genuinely Cool Tech,’ Bitcoin SV Is ‘Pure Dumpster Fire’

dumpster fire

Bitcoin Cash ‘Satoshi’s Vision’ (BSV), the new hard fork of Bitcoin Cash (BCH), is a “pure dumpster fire,” Ethereum co-founder Vitalik Buterin has said.


Cool Vs. Dumpster Hot Air

In a Twitter discussion with cryptocurrency commentator and entrepreneur Tuur Demeester December 25, Buterin debated the pros and cons of two algorithms used by many cryptocurrencies: Proof-of-Work (PoW) and Proof-of-Stake (PoS).

As part of its long-term upgrade schedule, Ethereum plans to transfer from PoW to PoS, with Buterin saying he “doesn’t believe” in the former.

Vitalik Buterin

BSV, which plans to use giant block sizes to solve scaling difficulties ‘on chain,’ has faced technical and publicity hurdles since it came into being on November 15.

The altcoin unwittingly became collateral damage from the debate after an advocate requested Buterin’s opinion on it.

The user had claimed the scaling plans from Bitcoin (BTC) developers – specifically ‘off-chain’ scaling via the Lightning Network, was a “joke.”

Buterin slickly disagreed.

“I have my disagreements with the bitcoin roadmap, PoW, etc but they’re trying to do something that’s genuinely cool tech,” he responded.

“BSV is a pure dumpster fire.”

Traders Stay Warm This Christmas

In a curious move, the BSV proponent did not criticize Buterin for his negative perspective, something which has become commonplace among the coin’s better-known activists.

Craig Wright, the self-proclaimed ‘Satoshi Nakamoto,’ has continued to earn a notorious reputation for his lack of tolerance of BSV 00 naysayers.

As Bitcoinist reported, an apparent spat with BCH advocate Roger Ver prior to the hard fork saw Wright pen an email calling Ver his “enemy.”

“Have a nice life. You will now discover me when pissed off,” he wrote.

BCH, BSV and ETH have meanwhile all staged something of an unlikely recovery over the past week. BCH had led the rally, more than doubling in value to hit more than $200 before correcting nearer to $170. ETH managed $160 from a low of $73.

Do you agree with Vitalik Buterin’s comments? Let us know in the comments below!


Images courtesy of Shutterstock, Bitcoinist archives

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Source: Blockchain

Bitcoin Private (BTCP)…Privately Pre-Mined 2 Million Coins for Its Founders

The creator of altcoin Bitcoin Private (BTCP) was battling accusations his project was a “scam” December 24 after an investigation revealed over 2 million ‘secret’ coins.


Coinmetrics: There Are 2.04M ‘Extra’ BTCP

BTCP 00, a so-called “fork merge” of the Bitcoin and ZClassic blockchains, fell 20 percent after research group Coinmetrics published the information Sunday.

After analyzing the BTCP blockchain, the company claims, it became apparent an extra 2.04 million coins were mined during its genesis – likely unknown to miners, users and perhaps most developers.

Known as a “covert premine,” the tokens were stored in a “shielded pool.”

“Three hundred thousand units of the covert premine were moved out of the shielded pool towards what appear to be exchanges,” a summary of the investigation continues.

Ultimately the lack of uptake of BTCP by the recipients of the airdrop meant that those additional 300k transparent units today represent close to 10% of the BTCP supply in circulation, with 1.80M covertly minted units remaining in the shielded pool.

Caught By Surprise?

The response from developers and creator Rhett Creighton, who also led the formation of ZClassic from ZCash, differed.

Creighton was first to respond to Coinmetrics, writing on Twitter he thought BTCP had suffered a “covert inflation attack.” He subsequently deleted the tweet.

Afterward, operations lead Jake Brutman conversely suggested Creighton personally sanctioned the 300,000 token deployment.

“This was some of the earliest code work done,” he tweeted.

From my recollection, it was a bounty placed by Rhett and the code was merged by Rhett when he was acting as Lead Developer.

In an update, Creighton meanwhile said he had “not been involved with the Bitcoin Private project for many months.”

“I never wrote any software for it. I was never paid or given any BTCP for free,” he continued.

I have no knowledge of who may or may not have been involved in the inflation hack.

He subsequently faced calls from well-known pundits that he was a “scammer” and even “deserved some years in prison.”

Consumers remain cautious about the impact of hard forks in the current climate following the debacle surrounded that of another Bitcoin fork, Bitcoin Cash (BCH).

Splitting into two chains in November, BCH and its new spin-off Bitcoin Cash SV (BSV) entered a bitter conflict in order to woo miners and build a reputation despite growing controversy about their technical prowess.

What do you think about the possible Bitcoin Private covert premine? Let us know in the comments below!


Images courtesy of Shutterstock

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Source: Blockchain

Bitfinex Opens Trading of USD-Pegged Tether Against USD

Tether Bitfinex USDT/USD

Cryptocurrency exchange Bitfinex has announced it will support trading of USD denominated stablecoin Tether (USDT) against fiat USD from Friday.


Bitfinex Hedging A Hedge

The curious decision, which the exchange revealed in a blog post just hours before the pair went live, appears to be the first of its kind in the cryptocurrency industry.

Each unit of USDT is notionally backed by 1 USD, and the stablecoin is designed to be used as a cryptographic hedge against volatile assets without the need to convert into fiat.

The exchange rate of USDT 00, in reality, tends to fluctuate slightly around $1. For example, this year saw Tether price drop to as low as $0.85 during a period of high volatility.

Bitfinex’s tacit admission that USDT is insufficient as a stable alternative to USD is made all the more unusual by the fact that the platform and Tether share the same CEO.

“Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery, but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins,” officials wrote in the blog post.

Along with a dedicated lending market, USDT will be available as collateral for margin positions.

Tether-Bitfinex Media Rumors

The move comes days after an investigation by Bloomberg allegedly put to rest rumors that Tether did not hold full USD reserves for its token supply.

Such rumors had abounded during 2018 since both Tether and Bitfinex received subpoenas from US regulators late last year and had grown to include accusations the latter was insolvent.

Last month, Tether succeeded in switching banking partners to Bahamas-based Deltec, capping separate scrutiny of the financial buoyancy of its original banking partner Noble Bank.

A wealth of both USD and other stablecoins has come to market in recent months, with exchanges adding multiple assets in a bid to provide users with options against rapidly declining major crypto tokens.

What do you think about Bitfinex launching trading of Tether against USD? Let us know in the comments below!


Images courtesy of Shutterstock

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Source: Blockchain

Facebook Wants to Mint Its Own Stablecoin for WhatsApp

facebook whatsapp

Facebook, the world’s largest social media website has been reportedly working on a stablecoin to allow WhatsApp users to transfer money. The company’s initial focus is supposedly the remittance market in India. 


Facebook’s Stablecoin

The social media mogul is developing a stablecoin pegged to the US dollar, Bloomberg reports, citing sources who have asked not to be named.

Purportedly, the company intends to use the cryptocurrency to allow WhatsApp users to transfer money. According to the report, Facebook’s initial target will be the remittance market in India.

WhatsApp was acquired by Facebook back in 2014. The popular messaging platform is purportedly popular in India, boasting over 200 million users. Bloomberg also reports that the country leads the world in terms of remittances as people have sent home $69 billion in 2017 alone.

A Challenging Road Ahead

Facebook’s foray into the field of blockchain was attested back in May when the head of their Messenger platform David Marcus announced the formation of a “small” group to “explore how to best leverage Blockchain across Facebook, starting from scratch.”

A Facebook spokesman said a few days ago:

Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. […] This new small team is exploring many different applications. We don’t have anything further to share.

However, the launch of the purported stablecoin may still be far off. According to the sources, the company is still working on the strategy, including a plan for custody assets or regular currencies, which would be held to protect the value of the stablecoin.

Commenting on the matter was Arran Stewart, co-founder, and CVO of a blockchain-powered recruitment company, who also identified potential hurdles in Facebook’s plan:

There are many hurdles with creating effective use of blockchain technology, especially on such a big of scale as Facebook. I would imagine that their approach may be a private hyper ledger fabric system for recording user profile data, potentially for the purposes of security but there are also many other things that Facebook maybe considering – such as becoming a merchant and offering the ability for one user to send money to another or even the purchase of goods or services through the Facebook platforms.

Others, such as software programmer Udi Wetheimer, questioned Facebook’s motives in having their own stablecoin. Thought adoption of virtual currency by a social media giant like Facebook could be a good way to onramp new Bitcoin users, he noted.

In July, Bitcoinist reported that Viber, one of WhatsApp’s biggest competitors, is also working on launching its own cryptocurrency for in-app money transfers.

What do you think of Facebook’s plans to issue a stablecoin? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

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Source: Blockchain

Study: Asia Has More Impact on Bitcoin Price Than America and Europe

asia shanghai bitcoin price

With events like SEC approval for Bitcoin ETFs and the introduction of cryptocurrency derivatives, it is easy to imagine the market being driven by news out of the United States. However, new research suggests that Asia, and not the West, is the dominant driver of Bitcoin price and cryptocurrency markets.


Western Focus Might be Misleading

Jay Clayton, the Chairman of the United States Securities and Exchange Commission (SEC) commented back in June 2018 as part of his comments about the Commission’s stance on whether cryptocurrencies where securities or not, saying:

We’ve (the SEC) been doing this for a long time, and we’ve built a $19 trillion economy, a securities market that is the envy of the world, following these rules.

While it is true that the Western hemisphere exerts a lot of dominance over the mainstream asset market, the same doesn’t necessarily apply to Bitcoin and the altcoin market. However, it isn’t unusual to see US-based “trading experts” to argue that things like the CME and CBOE BTC futures are driving Bitcoin price 00.

According to Mosaic, a cryptocurrency data and research firm, developments in Asia exert a significantly greater effect on the virtual currency market than the ones from the Western part of the globe.

The research firm says there have been 11 major news developments from Asia concerning cryptocurrencies. These headlines impacted the market by an average of 18.61 percent.

The most significant of these developments came at the beginning of the year when CoinMarketCap removed data from South Korean exchanges. According to Mosaic, this singular event crashed the market by more than 57 percent.

Back in mid-2018 when BTC price rallied from $6,200 to $8,000, many commentators pointed to news coming out of Asia. At the time, wealthy Chinese citizens turned to Bitcoin as a haven as the government accelerated the devaluation of its currency.

Asia Dominates Mining and Cryptocurrency Exchange

To start with, Asia dominates both the mining and exchange landscape. Even with the crackdown by China, other places like Singapore, Hong Kong, Japan, and South Korea are hotspots for numerous cryptocurrency exchange platforms and related businesses.

Why is this information relevant? Well, apart from the apparent trading volume conclusion, there is also the language component. These Asian exchanges make sure their services are offered in their local languages, bringing trading closer to the local population. With relatively cheaper electricity, the region (especially China), is still a dominant player in the bitcoin mining industry.

Hong Kong cryptocurrency

Earlier this year, Arthur Hayes, CEO of Hong Kong-based BitMex platform, said that crypto trading in Asia is more developed than in the West.

“Asia dominates cryptos because they’re very used to digital trading assets. South Korea has been trading digital goods related to gaming for two decades. When you move to a purely money based digital currency, they understand that culturally, so they get on board quickly,” he said. Therefore, it stands to reason that news out of that region would have a much greater sway on the market than in the US and Europe.

The researchers conclude that due to the “pivotal role” Asia plays in cryptocurrency, “investors seeking a better idea of what drives crypto prices would do well to look East.”

Will an influx of US-based institutional investors shift the tide of dominance towards the Western hemisphere? Please share your thoughts with us in the comments below.


Image courtesy of Mosaic.io., Shutterstock

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Source: Blockchain

Russia Says Venezuela’s Petro Acceptance ‘Not Happening’

Russia Venezuela Petro

Russia has not discounted the idea of using state-issued cryptocurrency Petro in commercial operations with Venezuela.


Russia: No Petro Payments ‘Yet’

Those were the words of deputy finance minister Sergey Storchak speaking to reporters this week, local news outlet RIA Novosti reported December 13.

Petro, which the Venezuelan government hopes to use to shore up its rapidly failing economy and bypass western sanctions, formally launched in October.

President Nicolas Maduro has since artificially raised its exchange rate in the country’s fiat currency, the sovereign bolivar (VES), several times.

High-level talks between Caracas and Moscow are ongoing, but direct integration of Petro by the latter remains off the table.

“Representatives from our tax service and central bank… got acquainted with the cryptocurrency (Venezuela) is currently introducing,” Storchak said.

But no more than that. As for payments, they’re not happening yet.

Sanctioned ‘States’ Ditch Dollars With Crypto

Russia has demonstrated a willingness to help Maduro sidestep punitive sanctions on the Venezuelan economy as part of his efforts to ingratiate Petro with the international community.

Itself based on highly suspect financials, the cryptocurrency came with its own publicity group which hoped to convince exchanges in various countries to accept it for trade.

The scheme appears to have done little to change the lives of citizens, the majority of whom appear to be living in increasingly desperate conditions.

Venezuelan Hyperinflation Makes Bitcoin An Ideal Way To Transact

As Bitcoinist has frequently reported, informal Bitcoin 00 purchasing activity to continues to hit new highs on an almost weekly basis.

A hook-up between Russia and Petro would meanwhile echo similar desires from other states looking to overcome bureaucratic hurdles and economic sanctions.

Unrecognized countries supported by Russia – Abkhazia in Georgia, Transnistria in Moldova and the two ‘People’s Republics’ in Eastern Ukraine – have variously stated plans to use a cryptocurrency to improve their economic buoyancy.

Two of the three informal states currently use the Russian ruble, itself feeling the pinch from sanctions, while Transnistria’s own ruble has no legal status outside its borders.

What do you think about Russia’s potential interaction with Petro? Let us know in the comments below!


Images courtesy of Shutterstock

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Source: Blockchain