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

SEC Report: Examining Cryptocurrency a Priority in 2019

SEC EtherDelta securities

The Office of Compliance Inspections and Examinations (OCIE) of the United States Securities and Exchange Commission (SEC) listed the cryptocurrency market as one of the six focus points of its compliance monitoring activities for 2019.


Spotlight on the Cryptocurrency Market

According to a report titled “2019 Examination Priorities,” OCIE says it plans to shine the spotlight on the goings-on in the cryptocurrency. An excerpt from the report relating to cryptocurrencies reads:

Given the significant growth and risks presented in this [the crypto] market, OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance. In particular, through high-level inquiries, OCIE will take steps to identify market participants offering, selling, trading, and managing these products or considering or actively seeking to offer these products and then assess the extent of their activities.

To this end, the OCIE plans to examine the activities of firms operating in the digital asset market. This examination will cover sale, trading, as well as the management of cryptocurrency assets. The OCIE also plans to pay particular attention to cryptos deemed to be securities.

Commenting on the approach for 2019, Pete Driscoll, Director of the OCIE, said:

OCIE is steadfast in its commitment to protect investors, ensure market integrity and support responsible capital formation through risk-focused strategies that improve compliance, prevent fraud, monitor risk, and inform policy.

Identifying the virtual currency market as a priority isn’t a new development for the OCIE. Back in 2018, the emerging market also formed part of the OCIE’s agenda. However, the mandate for 2019 appears to be an extension of the goal for last year, which focused primarily on risk and security.

Too Much Regulation?

The expansion of OCIE’s focus on digital assets comes at a time when U.S. Federal Lawmakers are trying to establish a separate regulatory ambit for cryptocurrencies. Some commentators feel the SEC is over-regulating the industry, slowing the rate of innovation in the country with regard to digital assets.

In December 2018, Reuters reported that members of the GOP were frustrated with the leadership of the SEC over their stance on most ICOs being securities. This new report from the OCIE expanding its examination focus might exacerbate such concerns. Meanwhile, for the SEC, the Commission continues to state that strict laws create a safer marketplace.

What do you think about the SEC’s focus on cryptocurrency in 2019? Let us know your thoughts in the comments below!


Image courtesy of SEC.gov, Shutterstock

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Source: Blockchain

BIS Reports 70% of Central Banks Are Studying Cryptocurrencies

BIS

A new report published by the Bank of International Settlements (BIS) shows that the majority of central banks are studying central bank digital currencies (CBDC). However, most of them are unlikely to issue any type of digital currency in the near future. 


CBDC ‘Unlikely’ in The Short Term

BIS published the results of a new survey on central banks studying the technology behind Bitcoin and cryptocurrencies. A total of 63 banks have responded. They represent jurisdictions, which cover about 80 percent of the population of the world and more than 90 percent of its entire economic output.

The intention of the survey was to find out whether central banks currently are developing their own central bank digital currencies (CBDC) and how likely they are to issue them.

Of the 63 banks, 70 percent said that they are either currently working or will soon be engaged in work on CBDC.

However, this includes conducting conceptual research on the matter, sharing studies and views of developing a “common understanding of this new field of study.” According to the report, half of the respondents have moved to a more “hands-on” proof-of-concept activities in order to test new technologies.

The report reveals that 85 percent of the central banks are unlikely or very unlikely to issue any type of CBDC in the short term (1-3 years).

Back and Forth

In September, Bitcoinist reported that the European Central Bank (ECB) has no intentions of issuing a central bank digital currency.

ECB

It’s also arguable whether a central bank issued digital currency will even fit the mold of decentralized cryptocurrencies. In December, a couple of researches at the St. Louis Fed, outlined that:

Once you add a central bank and remove the “permissionless” network—with nodes that can leave and join as they wish, there isn’t much left to the cryptocurrency you started with.

Nevertheless, some central banks remain open to the idea of CBDC. The BIS report outlines that the Central Bank of Uruguay has completed a pilot programme on a general purpose CBDC.

At the same time, the governor of UK’s central bank Mark Carney has previously said that the Bank of England is open to the idea of a central bank issued digital currency.

What do you think of CBDCs? Don’t hesitate to let us know in the comments below!


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Source: Blockchain

Looking to 2019: What Will Bring About The Next Crypto Bull?

new year 2019 bitcoin icos crypto bull

2018 is nearly finished and investors are cautiously optimistic about crypto’s prospects in 2019. While it’s great to think positive, what will it really take to turn the market around in 2019?


2018 was a Nightmare

As the end of 2018 approaches, there will be a steady barrage of articles writing 2018 off as a fluke correction year for crypto. Readers can also expect to be bombarded with proclamations that all cryptocurrencies have bottomed and 2019 will bring a bull run the likes of which the world has never seen.

With that said, 2018 was a rough year and the crypto-bear definitely roamed free and caused an unforeseeable amount of havoc. All criticism aside, 2019 should be a better year than 2018. Honestly, how could it get any worse?

Let’s take a look at what factors and new developments could help the crypto-market turn around next year.

Liquidity, Demand and Volume

Diminishing volume has been a recurring theme all throughout 2018 and a quick glance at a chart for Bitcoin or nearly any other cryptocurrency shows that repeated fake out rallies, dead cat bounces, bull traps and a continuous pattern of lower highs were clear signals that the market would continue trending down but hindsight is 20/20 isn’t it?

Evaporating demand for cryptocurrencies translated to free falling prices and sharp corrections that repeatedly pulled the market below crucial supports.

The launch of Bakkt’s Bitcoin futures exchange could assist with the demand, liquidity and volume of Bitcoin and there are rumors that the platform operators are considering adding other digital-assets.

As has been discussed throughout the year, institutional grade investment platforms provide an on digital assets ramp for hedge funds, institutional investors, family offices and other larger firms to access the crypto-market in a secure, regulated manner.

To ETF or Not to EFT?

Every month of 2018 was spent pondering whether or not the U.S. Securities and Exchange Commission (SEC) would approve a Bitcoin-based exchange-traded fund. For a time, it seemed that the entire lifeforce and future success of the crypto-market was reliant on the result of this decision and with each postponement and hint of denial the market steadily stepped down another leg.

At this point, it’s safe to say that most retail investors just want to scream out “Just get it over with already.” In other words, either deny or approve the damn thing so the market can react, accept and move on. Obviously, in the event of an approval, demand permitting, the market could experience an uptick in liquidity, demand, and volume.

Even if 2017’s bull rally was the product of a manipulative fluke, it is clear that main street investors appetite for creating a quick buck fueled a parabolic rally that will be the talk of ages.

While cognition is one of the key features that separates man from beast, a good rally and the chance to turn a quick profit is too hard for many a man to resist and if demand and investment from financial giants generate a trend change in the crypto-market, mainstream investors are bound to pile in.  

Whether it be parabolic frenzy or purchasing and advertisements from brokers and institutions, higher volume is required.

A New Year of Bullish Bets on CME & CBOE Futures

With Bitcoin shorted to nearly $3,000, Morgan Creek Digital’s Anthony Pompliano and other analysts are still suggesting the digital asset has further to fall. A possible silver lining to the whole situation is with the turn of a new year and Bitcoin price 00 so low, perhaps BTC bets on the CME and CBOE futures will turn bullish.

Analysts have correlated Bitcoin’s precipitous decline with the debut of Bitcoin futures and it seems that their approval and roll out came too late into Bitcoin’s 2017 rally to provide any benefit.

Hopefully, 2019 will reverse this trend as at some point if this trend does not reverse, there’s nowhere to go but up.

At the moment, SEC commissioner Hester Peirce, who many crypto-investors look to as a friend of crypto and affectionately refer to as Crypto-Mom pledges that she will continue to fight for crypto but also cautions, “Don’t hold your breath.

I do caution people to not live or die on when a crypto or Bitcoin ETF gets approved. You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto].

– Hester Peirce

The SEC Sets a Deadline to File Comments for or Against Bitcoin ETF Applications

Meanwhile, SEC Chairman Jay Clayton resolutely stands by his previous statement that a crypto-ETF is a no until manipulation no longer poses a threat. Clayton has repeatedly said,

I want to see better market surveillance and custody for digital currencies before being comfortable with a crypto ETF.

– Jay Clayton

One thing to look forward to in 2019 is the growth of genuine use cases as the market grows more dynamic and diversified. Investors would do well to redirect their focus from the oft disappointing discussion of Bitcoin ETFs and bull markets to growth opportunities within the expanding sections of the crypto market

Genuine Use Cases

2019 should see an expansion of the crypto payments sector and announcements like last week’s news about a partnership between hardware wallet manufacturer Ledger and payment startup Crypto.com are a preview of what’s to come. The sector requires more services that allow cryptocurrency holders to transact in crypto without having to first spend fiat or exit crypto to make fiat payments.

More brokers offering crypto-to-crypto payment services are needed and a growing number of companies are beginning to enter this space. Crypto holders want to spend their funds and an increasing number of businesses are looking to accept crypto.

In fact, a 2017 study from Visual Capitalist report found that the number of brick-and-mortar shops accepting cryptocurrencies grew by 30.3% and this is representative of nearly 11,300 retailers worldwide.

Even more encouraging is the forecast of the e-commerce and payments sector experiencing exponential growth by 2021. Revenue from E-commerce and mobile payment processors are predicted to rise from $528.2 billion to $885.4 billion.

2018 also saw the gradual development of new sectors in the crypto-hemisphere. In 2016 and 2017 investors earned a return on their investments through block rewards for mining and staking coins to support various networks.

As the ICO market withered in 2018, the profits from mining, masternode operation, and staking became less lucrative for many but new options for earning a return on crypto-holdings emerged.

Crypto-banking, crypto-lending, and crypto-to-crypto payments are all genius concepts that draw from the conventional business models of traditional finance but drop some of the challenges that come with traditional banking.

Stablecoins to the Rescue?

While still approached somewhat warily by investors, stablecoins offer a convenient, safe and at times lucrative (due to arbitrage) place to rest one’s funds as Bitcoin and altcoins whipsaw back and forth.

A number of stablecoins came on the market in 2018 and a currently giving Tether (USDT) a real run for the money. They might function as the saving grace to the cryptomarket as provide a regulated, stable, on-ramp for banks and businesses looking to dabble in crypto.

Also, with the ICO market in shambles, stablecoins and security token offerings could be the next assets that underpin an evolving fundraising model that traditional, blockchain and crypto-based startups need to acquire capital in 2019.

New ventures like the partnership between crypto-lender Nexo and stablecoin TrueUSD are likely to provide profitable alternatives to investors as holders can earn a return steady return on their digital assets and also acquire crypto-to-fiat loans on their crypto holdings.

Other crypto banking providers and payments companies like Nexo, FOTON Bank and Revolut are already making it easier for crypto-holders looking to acquire capital or make crypto payments quickly. The use of smart contracts and platform-specific native tokens are meant to bypass taxable conversions (crypto to fiat, crypto to crypto) and also remove the double transaction fees that those attempting to convert and spend crypto frequently encounter on exchanges.  

With forecast of a ‘revolutionary force’ in 2019, investors should keep a close eye on this corner of the crypto-sector to see what other services stablecoins could provide.

In 2019, it’s going to take more than pure speculation for traders to turn a profit and each investor will have to work a little bit harder and familiarize oneself with a maturing crypto-market.

Trading wise, investors will need to stay abreast of new developments and exploit the little opportunities in order to average a respectable profit. At this point, nobody is sure what the market holds for 2019 and it’s yet to be determined if a bottom has been found yet.

In order for the oft-mentioned ‘mass adoption’ that investors and analysts speak of to occur there needs to be genuine, convenient use cases for cryptocurrency other than just investing and spending.

What do you think it will take to turn the crypto-market around in 2019? Share your thoughts in the comments below.


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Source: Blockchain

Argentina Gets 7 New Bitcoin ATMs For Christmas

Argentina Bitcoin ATMs

Argentina ends the year on a Bitcoin high, as Athena Bitcoin Argentina rolls out seven Bitcoin ATMs (BATMs) with more to come. This now makes it the country with the fourth highest number of BATMs in Latin America.


Argentina Getting More Bitcoin ATMs

Before 2018, Argentina was faring rather badly in terms of BATM numbers, with only two in the whole country. Both of these were in the capital, Buenos Aries, although one was a very cool looking ‘arcade‘ machine, which also acted as an educational tool.

One of the designers of the arcade ATM, Santiago Molins, is now Director of Innovation at Athena Bitcoin. His vision for a Bitcoin-savvy Argentina is clearly a lot larger in scope.

The company has installed five new machines since September, in high traffic locations like shopping malls and Walmart stores. These are all in Buenos Aries, and Molins says there are another two devices not yet showing on CoinATMRadar.

He added that before the end of 2018, they will install another device in the nearby city of La Plata. And then in January. Molins explained:

The idea is to put in the first and second week of January the last ones that we have left in the laboratory, which would be two or three more. At this moment we are covering the Federal Capital, Buenos Aires and its surroundings.

Why The Sudden Increase?

Certainly, the jump from two Bitcoin ATMs to twelve or thirteen is a fairly impressive gain. The reasoning behind it, however, is somewhat less impressive, as sadly Argentina is going through a similar financial crisis to Venezuela.

While in humanitarian terms, the situation is a far cry from Venezuela’s economic turmoil, inflation in the country is rampant. LocalBitcoins volumes have spiked, as residents flock to Bitcoin and other cryptocurrencies in an attempt to protect their savings.

Expect to see a further influx of BATMs in the next year if the Argentinian economy doesn’t get any better.

But What About The 4000 ATMs Promised?

A very good point. In May, Bitcoinist reported that easing of regulations was set to see an explosion of ATMs across the country. US firm Odyssey touted a pre-agreed 4000 of the machines and claimed to have already installed 200 the previous year.

Apparently, that was all talk and no trousers. Back in October, Odyssey was still supposedly planning 150 ATMs by the end of this year, of which 80% were to be operational by the end of January 2019. This was to be followed by about 1600 BATMs by the end of next year.

Seems it’s best to count the devices on the ground, rather than the ones in some executives head.

Can Bitcoin ATMs boost adoption and help people avoid inflation in Latin America? Share your thoughts below!


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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!


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Source: Blockchain