Bitcoin rallies to hit a one-month high but experts warn of a volatile upcoming event
- The bitcoin price hit a one-month high on Monday after a rally over the weekend
- Despite a crackdown on bitcoin in China, other markets like Japan have had a positive impact on the price of the digital currency
- The cryptocurrency has had a volatile month after hitting an all-time high then falling below $3,000
Bitcoin staged a rally over the weekend to hit a one-month high despite experts warning of a potentially volatile upcoming event for the cryptocurrency.
The digital currency hit a high of $4,867 Monday, its highest since Sept. 2 and before the China crackdown, according to data from industry website CoinDesk. Bitcoin last traded nearly 5 percent higher on the day at $4,821.
With Monday’s gains, the digital currency had a market capitalization of $80 billion. Meanwhile, the prices of most other major digital currencies declined. Ethereum fell 4 percent, to $296, according to CoinDesk. The bitcoin offshoot, bitcoin cash, was one of the greatest decliners, falling nearly 13 percent, to $304, according to CoinMarketCap.
“There has been a rotation of money out of the lower-quality names and into bitcoin,” Ronnie Moas, founder of Standpoint Research, told CNBC. He also said people are speculating that “bitcoin will rally following the upcoming fork as it did following the August 1 fork” into bitcoin and bitcoin cash.
A similar split is scheduled for mid-November.
Bitcoin three-month performance
As a result of Monday’s gains, bitcoin held 51.5 percent of the total market capitalization of all digital currencies, up from around 46 percent on Sept. 2, according to CoinMarketCap.
The market share gains are “a positive key price indicator for bitcoin and has got traders bullish,” Nolan Bauerle, director of research at CoinDesk, said in an email to CNBC.
Bauerle also attributed bitcoin’s gains to indications that more developers are adopting an upgrade called SegWit, while the Chinese crackdown on bitcoin has opened opportunities for digital currency enthusiasts in other parts of the world.
Bitcoin has had a rocky few weeks. It hit an all-time high on September 2 of $5,013.91, before declining sharply to below $3,000 in the next two weeks.
Investors were concerned about the sharp price rise of bitcoin but also some of the regulatory clampdowns by China. The world’s second-largest economy banned initial coin offerings (ICOs), which is a new way for cryptocurrency start-ups to raise funds by issuing digital tokens. The largest bitcoin exchanges in China have also shut down their operations there.
And at the same time, major business leaders have poured cold water over bitcoin. JPMorgan Chase CEO Jamie Dimon said bitcoin “is a fraud” last month.
But some of the negative sentiment has been offset by other positive developments in the industry.
China’s state-backed Xinhua news agency also published a commentary piece last week that discussed how local authorities could allow digital currency exchanges to operate by requiring licenses.
Japan appears to be filling the void left by China with supportive regulation. Earlier this year, Japan legalized bitcoin, with major retailers beginning to accept it as a form of payment. And last month, the country’s financial services watchdog recognized 11 companies as registered cryptocurrency exchange operators.
Institutional investors are also beginning to look at bitcoin more seriously. Goldman Sachs is considering the launch of a new trading operation focused on bitcoin and other digital currencies, a company official told CNBC last week.
“Bitcoin’s rally is continuing off the back of a more certain regulatory environment across the world, most notably in Japan. This has encouraged more institutional funds to enter the market and we are finally seeing the effect of this additional liquidity,” Aurélien Menant, founder and CEO of Gatecoin, told CNBC by email on Monday.
Menant told CNBC last week that bitcoin could get close to $6,000 by the end of the year, but short-term volatility could be ahead. That’s because earlier this year, bitcoin underwent a split or “fork” which created another cryptocurrency called bitcoin cash.
That split happened due to technical changes in the underlying technology behind bitcoin, known as the blockchain. But that change, which is currently being implemented, could be rejected by a large section of the bitcoin community, which could actually lead to another fork.
“The forthcoming bitcoin fork in November will result in greater volatility and risk for this new asset class,” Menant said.
Written by CNBC
Bitcoin is up nearly 60% from its September low
Bitcoin on Monday was mounting a comeback, continuing to rally off its mid-September low ptember as speculative purchases around the No. 1 cryptocurrency shifts into higher gear.
Where are crytocurrencies trading?
A single bitcoin was most recently trading at $4,712, up 2.2% on the day, but up around 60% since the world’s most prominent currency hit a recent low of $2,951.15, according to research and data site Coindesk.com. That nadir followed critical comments from Wall Street heavyweights, including J.P. Morgan Chase & Co.JPM, -0.53% Chief Executive Jamie DImon, who declared bitcoin “a fraud” that would “eventually blow up.” “It’s worse than tulip bulbs and won’t end well,” Dimon said, referring to the classic, 17th century asset bubble.
Ether tokens, trading on the Ethereum blockchain, meanwhile, were down about 5.2%, at $293. Ether tokens have risen about 25% since their mid-September retreat.
So far this year, Ether has soared more than 3,500% from around $8, while bitcoin has climbed 390%.
What’s driving cryptocurrency markets?
Cybercurrency participants say bitcoin has gotten a bump from expectations of two separate forks on the bitcoin blockchain that could create alternative versions of the core currency. Before, the prospects of such forks rattled the digital currency, dragging prices lower. However, traders are using it as an opportunity to sell alternative coins, including Ether, and buy bitcoin, expecting to receive the new currencies when expected splits in the currency occur later this month and in November.
What are digital-currency participants saying?
“If you own bitcoin prior to [hard fork] then you own bitcoin and the new coins. So people are rotate from altcoins back into bitcoin,” said Rob Viglione, co-founder of ZenCash, a privacy-oriented cryptocoin.
Bharath Rao, CEO of Leverj, a decentralized exchange for cryptocurrency derivatives, referred to the scenario as “free money” and said he expects the price of bitcoin to continue to rise into November as traders employ this rotation.
What is the fork in bitcoin?
A pair of controversial forks, not seen as gaining wide acceptance by the digital currency community are in the works.
In late October, so-called Bitcoin Gold designed to address challenges mining for bitcoin using computers to solve complex problems, will be launched.
In November, bitcoin will face a second version of Segregation Witness, or SegWit2x, which would create an alternative version of the bitcoin that would increase its so-called block size to 2 mega byes from the current 1MB.
If completed, those forks would create two additional versions of bitcoin, about two months after Bitcoin Cash erupted out of bitcoin back in early August.
Holders of bitcoin before those forks will receive an equivalent amount of the alternative coins after the so-called hard forks.
Written by MarketWatch.com
Regulated Cryptocurrency Betting Just Got a Big Boost in Europe
Regulated cryptocurrency gambling is about open up across a large swathe of Europe.
Announced today, major eSports platform Unikrn has been awarded a gambling license in Malta, a move that will open up its platform to real-money wagering via its UnikoinGold crypto token.
UnikoinGold – which is based on the ERC-20 ethereum standard and is currently being distributed via a token sale or ICO – is being deployed as a medium for real-money wagering in licensed jurisdictions. And, with the Malta licensure, that will mean 80 percent of the European continent.
According to Rahul Sood, chief executive of Unikrn:
“The European expansion means there’s going to be a large and soon-growing marketplace of users, including the real-money transition of already established users, who want to buy, exchange and use our token to bet on our platform.”
And Sood isn’t wrong.
The company formed Unikrn EU through a joint venture with RBP, a leading online gambling platform in France boasting over 300,000 registered users and 1 million unique monthly visitors.
Further, eSports – video games played competitively for both online and in-person audiences – are surging in popularity with young people, and are widely considered to be the fastest growing “sport” in the world. Market research firm Newzoo estimates that global eSports revenues for 2017 will top $696 million – a 41 percent year-over-year jump – with that figure predicted to reach $1.5 billion by 2020.
As profiled by CoinDesk, Unikrn has won the backing of high-profile investors like Mark Cuban, Ashton Kutcher and Elisabeth Murdoch.
Until now, Unikrn had only offered real-money betting in Australia and the United Kingdom – the only two nations where it held gambling licenses. It offered free betting in other jurisdictions on popular first-person shooter and multiplayer battle arena video games such as Counterstrike: Global Offensive, League of Legends and Dota 2.
This was all done through its older free Unikoin tokens, but these are now being retired thanks to the introduction of UnikoinGold and its ICO (now reaching its close).
The Malta licensure and rollout of the UnikoinGold token are critical steps toward migrating the company’s free-play bettor base to real money, as well as broadening the number of non-betting related uses that a token owner can derive from holding them.
Another free token, UnikoinSilver, will be launched to keep players in non-licensed areas engaged, though these tokens can’t be traded on secondary markets.
For Sood, the decision to transition away from the strictly free-play token was straightforward, particularly as his team had proved the concept of a tokenized scheme for building its global community when it released the original Unikoin two years ago.
Sood told CoinDesk:
“We couldn’t have fathomed how popular they’d be. We turned over more than a quarter billion of them in under two years.”
Part of the new token’s appeal is that participants, whether gamers or spectators, don’t necessarily need to wager to earn tokens.
For example, tokens can be earned by playing in a tournament or by just watching a match online or in person.
Sood explained: “Earning, using and utilizing UnikoinGold is not going to be restricted by region, and we think the more fans that are able to get it, the more uses we can give it. The more uses we give it, the more people will want it, and that drives a ton of potential into our platform.”
Both the betting and non-betting appeal of eSports has sparked great interest among the global gambling industry, as well as Las Vegas casinos, all of which are desperately seeking ways to appeal to younger audiences (seven separate panel sessions were held on the topic at last week’s Global Gaming Expo in Las Vegas last week, for example).
“Walk through any slot floor and you will see more walkers and wheelchairs than at a Jimmy Buffet concert in a retirement home,” Sood said of the industry’s demographic struggles.
But the only way to bring about this revolution in gambling, according to Sood, is to play by the rules.
The Malta licensure, he argued, highlights the company’s commitment to providing its customers a safe, legal and regulated ecosystem that is underpinned by the token. And, notably, Malta is seeking to become a global leader in legal and regulated cryptocurrency gambling.
The key difference between UnikoinGold and other “gambling tokens” is that most others simply serve as little more than a “shortsighted” means of placing a bet, Sood said, adding:
“Many companies are doing ICOs for all the wrong reasons. They believe that by using crypto they can skirt gambling regulation, which is wrong. We think it will eventually catch up to them, and anybody holding their tokens.”
eSports competition image via Shutterstock
Transparent ICOs? Blockchain Projects Prove Value with New Accounting Tech
With new initial coin offerings (ICOs) now being announced on an almost daily basis, it’s been challenging for investors to decide where to invest, or what exactly they’re getting for their money.
Valuations have largely been determined to date by trust in founders, the white papers they write and the strength of target use cases. But with more than $2 billion having already flowed into token sales, blockchain startup Balanc3 thinks it’s time to make ICO accounting more sophisticated.
Last week, in the first live demo of its new accounting platform, the company gave more than 200 people from the “Big Four” accounting firms, other blockchain startups and regulatory agencies a glimpse into a new way to value ethereum-based token sales.
In an exclusive interview, Balanc3’s Griffin Anderson told CoinDesk:
“It really allows the industry to begin to hold accountable these token sales that have essentially almost gone public, and the markets will be able to use this information to more accurately price what these token sales are worth.”
While this would be good for investors, it’s not as easy as just switching this functionality on to provide such insight. ICO issuers will have to sign up with Balanc3 and turn over all addresses associated with the offering. Balanc3 then aggregates that data into a single account where project bookkeepers can provide line-by-line categorization (such as payroll, inventory, sales, business travel etc) of all transactions entering and leaving those accounts.
While it might seem hard to imagine a company that has conducted an ICO opening up its books to investors, Balanc3 believes investors might start demanding that transparency to gain the security of knowing where their money is being used.
Currently working on the beta version – with hopes of it going live in early November – Balanc3 is trying to figure out how best to feed the information ICOs put into the system to investors.
In the demo, live financial statements were revealed for token sales from early adopters Aragon (valued at $56 million), Digix (valued at $140 million) and Gnosis (valued at $142 million). Included in the data were expenses such as wages and travel, and a breakdown of other crypto-assets owned by the companies.
“For those that operate at the highest level of standards,” said Anderson, “this may actually increase their value and market cap, depending on how the market sees it.”
Aside from possible bumps to their market cap, ICO holders might also adopt the platform for its features, which Anderson touted as saving both time and costs.
For instance, the categories and other metadata tacked onto transactions can aid the automated reconciliation of accounts, which should make transactions more easily identifiable and, in turn, cheaper to track.
While accountants using the alpha release are still expected to manually add the appropriate descriptions, Anderson said that eventually that process could be automated.
“Going forward, there will be no input from the accountant or bookkeeper. It will be completely automated in real time,” he said. “You’ll be able to see and view the financial information in real time and get a real-time evaluation of these underlying protocols using blockchain technology.”
The other possible benefit of the Balanc3 platform is the so-called triple-entry accounting (from where Balanc3 took its name). Transactions are not only logged to show the money received in one account and deducted in another, but are also recorded on a cryptographically protected ledger.
Originally conceived in 2005 paper by Ian Grigg, triple-entry accounting gained more momentum with the advent of blockchain technology, which creates a cryptographically secure public account.
The hype and subsequent growth of the ICO market has not only caught the attention of startups and investors, though. It’s also piqued the interest of regulators.
After years of waiting to provide formal guidance, the U.S. Securities and Exchange Commission (SEC) recently issued a trove of documents and most recently created an entire unit dedicated to policing token-based investment vehicles. Other jurisdictions around the world are also starting to weigh in, some extending an accommodating hand and others taking a harsh stance.
Anderson believes the Balanc3 platform, among other things, shows the industry is interested in proactively taking steps to hold companies accountable and keep investors safe, which could influence how future regulatory hammers come down.
“Regulation may still be needed, it’s a little unknown right now,” Anderson said, concluding:
“But what you’re starting to see is the first step to the industry saying, ‘we’re going to take charge, we’re going to hold ourselves to a higher degree of standards and accountability’.”
Live demo image via Michael Del Castillo, Written by CoinDesk
Overstock’s Regulated Token Exchange Will Launch with Own ICO
Retail giant Overstock.com is to launch its new regulated token exchange with its own initial coin offering (ICO), according to a news report.
The token sale will be the inaugural event for the new exchange, which is set to be the first marketplace specifically for trading tokens classed as securities in the U.S. The service is being launched under the umbrella of Overstock’s capital markets arm, tØ.
The fund-raising effort will see the creation and sale of a tØ-specific token, which users must buy in order to pay for future services.
Overstock CEO Patrick Byrne told International Business Times (IBT) that it will be distinct from other tokens on the exchange, being a so-called utility coin and not a security.
The company expects to raise $200 million to $500 million “easily” via the ICO, Byrne said.
A joint venture with RenGen and Argon Group, the upcoming exchange will be an alternative trading system (ATS) compliant with the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulations.
Originally launched for the trading of blockchain-based stocks, tØ moved to create the regulated token exchange in response to the recent growth of the ICO use case.
As tØ is already SEC regulated, Byrne told IBT that building the new service was a natural process, stating: “We took something that was already legit and legal, and we just adapted it so it could handle blockchain.”
“If there’s one company that could legitimately issue a token it should be us.”
The platform is expected to launch along with the new token “before Thanksgiving,” IBT reports.
Written by CoinDesk