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This Week on Coin Street – 10 December 2017

Week ending December 10th, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

Regular followers of my weekly market wrap will have notice that more often than not I start off  by telling you Bitcoin hit an all time high during the week.  This week is no different.  Bitcoin hit $20,000 briefly.  Twenty thousand US Dollars for a single one.  That’s bonkers, mental, crazy, wild, insane.  Add into the mix the fact the Lite Coin and Ethereum also saw their all time highs this week and consider the fact that the total market cap for all crypto currencies soared past $400 billion.  So a pretty standard week in some respects but not exactly normal either.

The big news this week, knocking all the other crytpo doings off the top spot has to be the launch of the first ever real world Bitcoin futures product on the CBOE.  This is massive and as we have previously reported, represents a coming of age for Bitcoin.  So much has been discussed regarding this and what it means for the price that we can’t opine any longer.   We are but hours away from the launch.  It’s definitely going to be volatile and probably not going to go the way people expect.  Fasten your seat belt and hold on tight.  Bitcoin is about to get serious. (Source)

A further word of caution for those readers who are still learning about the space and how to get involved.  We have been hearing more regular reports about newcomers getting involved in CFDs and other such risky investments.  We don’t offer investment advice here, but we do urge caution as it can be complicated and confusing at first.  Coin Street have a free beginners guide which you can access here and which will guide you through the basics.  Take your time if you intend to make the leap into a crypto investment and above all make sure you are getting what you pay for.  A CFD doesn’t actually buy you any coin, it’s just a complicated and confusing way of betting on Bitcoin and a sure way to lose your money if you don’t know exactly what you are doing.  If in doubt just ask.  We have an active community of admins and members on Facebook who are always happy to guide the way.

Remember, the easiest and safest way to buy Bitcoin is via Coinbase.

This Week’s Highlights

Coinbase is the number one app on the Apple app store

That means that everyone wants to buy crypto.  Basically. (Source)

BBC Bitcoin.  I’m part of a crazy wave.

When the BBC are reporting on crypto, you want to read about it there rather than here right? After all they are real world journalists, they must know what they are talking about. (Source)

Winklevoss Twins Expect Bitcoin Market Cap to Surpass Trillions in Long-Term

Tyler and Cameron Winklevoss, better known as the Winklevoss twins, expect the market valuation of bitcoin to surpass trillions of dollars in the upcoming years. The twins were recently reported as being the first Bitcoin Billionaires, fortunately they aren’t in the least bit smug, just check them out in any of the interviews they give.  Not smug. (Source)

Exponential Growth: Number of Bitcoin Users to Reach 200 Million by 2024

A study conducted by Dr. Garrick Hileman and Michel Rauchs in March of 2017 revealed that the number of active users of bitcoin wallets was in the range of 2.9 million and 5.8 million.
However, since then, proportional to the market valuation and price of bitcoin, the cryptocurrency’s user base has grown at a rapid rate. Coinbase alone, the global market’s largest bitcoin brokerage and wallet platform, serves more than 13 million active users. In November alone, Coinbase recorded 1.2 million users. (Source)

Big Banks Block Client Access to Sunday’s Bitcoin Futures

Big banks are not rushing to facilitate investment in the first bitcoin futures market that goes live on Sunday. Citigroup Inc. and Bank of America Merrill Lynch have told customers they will not provide access to the CBOE Bitcoin futures that goes live on Sunday, according to The Wall Street Journal. (Source)

British spy agency GCHQ tests Bitcoin risks

The Treasury has enlisted Britain’s spy agency to probe the risks associated with Bitcoin, as the digital currency’s price continues to soar.Chris Ensor, the deputy director for cyber skills and growth at the National Cyber Security Centre, an arm of GCHQ, told The Telegraph it is investigating potential security risks on behalf of for Government departments.“We are interested in anything that could affect the country, so Bitcoin is a major thing now,” Mr Ensor said. He said work on the cryptocurrency included assessing how it works as the Treasury considers a crackdown, as well as the potential benefits of blockchain, its underlying technology.  (Source)

TL:DR The Treasury said Bitcoin is a major thing now.

The financial and investment press just can’t get enough of Bitcoin.

If they aren’t plugging Bitcoin itself then they are advising on what other crypto exposed stocks you should be looking at. (Source)

Bulgaria Government Shocked To Discover It Owns $3 Billion In Bitcoin

Bulgarian law enforcement jointly worked with the Southeast European Law Enforcement Center (SELC), a regional organization comprised of 12 member states, to bust a sophisticated organized-crime network, arresting twenty-three Bulgarian nationals and seizing a total of 213,519 bitcoins. At the time this was worth in the region of $500million, however it is now worth over $3 and a half BILLION*  Total is likely to have changed by the time you read this. (Source)

Coin Street hits 11,000 fans on Facebook

That’s pretty momentous news for us.  Why don’t you pat yourself on the back and invite a friend to join the party, We even have a chat group for newcomers to crypto with some friendly souls who would love to hear from you and answer all your questions.  Check it out.

Hey, have we talked about the kitties yet?

Basically, a frivolous game broke the Ethereum network this week.  That’s simultaneously terrifying and hilarious.  While I appreciate that the problems with the scaling and speed of the Ethereum network are well documented and are being addressed in the Raiden upgrade.  This was an eye opening example of just how poorly a decentralised network can perform when compared to anything in the real world.  Must do better. (Source)

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • December 10, 2017

Bitcoin might be a the new gold says J.P Morgan

In an unexpected twist,  financial giant, J.P Morgan has announced that Bitcoin could be on the verge of turning into a more traditional asset class like Gold.

Analyst Nikolaos Panigirtzoglou wrote in a report seen by the Telegraph that the CBOE Global Markets and CME Group proposals to offer Bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class and represents a maturation of the hotly debated crypto currency.

Whether or not his views are sanctioned by his boss Jamie Dimon is another matter.  As recently as last month Mr Dimon, who is a long standing and high profile crypto critic, called people who buy Bitcoin stupid and warned that it would blow up.

However his firm have previously shown that they are more open to Bitcoin, or at least blockchain technology than their leader might have you believe.  J.P Morgan sit on the Ethereum Alliance as partners and are apparently open to investment and investigation into all manner of blockchain technology.  They even have their own blockchain centre of excellence and Ethereum-esque blockchain ledger technology called Quorum.

As Nikolaos Panigirtzoglou, a global markets strategist at JPMorgan said:

“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors.”

These are interesting times indeed.  And with the launch of Bitcoin futures contracts only hours away, the story is set to get even more exciting.

Are you new to Bitcoin?  For a limited time only, you can grab our Bitcoin for Beginners course for absolutely free.  You can get access right here.
  • Neil
  • December 9, 2017

This Week on Coin Street – 19th November 2017

Week ending November 19th, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

It’s been a big news week for crypto and the take away has to be this: Bitcoin is unstoppable.

As I write this tonight, Bitcoin is sailing through the $8000 mark to reach another new all time high.  Every week Bitcoin fights off the rumours, the challenges, the outright attacks and just keeps on rolling.

This week we have conformation of the CME futures product, talk of mass integration on a major payment platform and more big players either entering the market for the first time or doubling down on their positions.

Hot on the heels of local exchanges in Venezuela witnessing massive price premiums, Bitcoin once again shows it’s the ultimate way to avoid capital controls and escape hyper inflation.  As of right now, one Bitcoin is trading at over $14,000 on local Zimbabwe exchanges.  Thinking about making a quick buck cashing out your BTC at a Zimbabwe local exchange for $14k?  Not so fast, you’ll need a local Zimbabwe bank account for your pay-out.  That’ll be a hard pass for me.   (Source)

This Week’s Highlights

CME lines up Bitcoin futures before the end of the year.

Investors who want to bet against bitcoin‘s massive price gains can likely do so beginning in mid-December, according to the head of the world’s largest futures exchange.  (Source)

Bitcoin vs. Bitcoin Cash: A Story Of Prioritization & Healthy Competition In Money

Excellent round up of the recent drama in the two Bitcoin Camps from Forbes. (Source)

Mike Novogratz goes deeper in Bitcoin

Former Fortress macro hedge fund manager Mike Novogratz told Reuters Global 2018 Investment Outlook Summit in New York that he bought $15 to $20 million worth of Bitcoin over the last weekend in that recent pullback. (Source)

One of the world’s largest hedge funds is ready to add bitcoin to ‘investment universe’

Man Group, a UK-based investment management firm, said it would include bitcoin in its “investment universe” if bitcoin futures successfully launch and as we have already confirmed the CME are launching their product soon. (Source)

Square’s Cash App: A New Place To Buy And Sell Bitcoin?

Some customers of Square’s Cash app have gotten a surprise in the past week.

The app, which is used for payments between friends and is a competitor to Venmo, has also given them the option to buy or sell Bitcoin given the Apps huge user base this is a major step for mass accessibility.  (Source)

U.K. Financial Regulator Warns Cryptocurrency CFDs Are “Being Marketed to Consumers”

CFDs or contracts for difference is a bit like betting.  You don’t own the underlying asset, you just effectively bet on its price movement.  It’s sort of the same as the futures markets derivatives products however only regulated investors can access those.  CFDs are available to anyone.  It’s basically a roulette table and the UKs FCA doesn’t like it. (Source)

American Express Opens First Blockchain Corridor With Ripple Tech

Massive news for ripple with American Express’s foreign exchange international payments (FXIP) business, the corridor that connects Amex customers in the U.S. using U.S. dollars to Santander bank accounts in the UK using British pounds – are now to be powered via Ripple’s blockchain, RippleNet.. Huge. (Source)

Coinbase Custody: A Digital Currency Custodian For Institutions

Coinbase continue to cement their position as the market leading exchange for safety, security and peace of mind.  Now they are launching an institutional grade safe haven, fully insured, regulated and overseen with a minimum 10 mil level, it is sure to atract interest from Wall street. (Source)

Major ATM Manufacturer Integrates Bitcoin, Exposure to Millions of Users

South Korea’s Hyosung, one of the largest ATM manufacturers in Asia, which also has its headquarters in Texas, has officially integrated Bitcoin into its international ATM models. Hyosung have an enormous exposure to not only the Asian markets but also the US (Source)

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.  

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • November 19, 2017

This Week on Coin Street – 12th November 2017

Week ending November 12th, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

The crypto currency world has never been boring, far from it, however this week has been so jam packed with mind boggling events, conspiracy theories and plot twists that it seems like the whole space is being driven by a team of Hollywood script writers and producers.

First Bitcoin hit another all time high of a little over $8000, then the Segwit2x fork cancels out of nowhere, (Source) this pumps the price even higher momentarily before everyone remembers that they were only in it for the free 2x coin and Bitcoin takes a nose dive.  Cue a couple of days of outrageous market movements in most of the alt coins, with many seeing 30-60% gains daily and then, just when the dust was beginning to settle the Bitcoin Cash crew led by Roger Ver the original Bitcoin Jesus pull all the stops out with their story that Bitcoin Cash is Bitcoin and somehow pull it off sending the price catapulting over 200% to as high as $2400.  Confused?  Me too.

It’s almost too convoluted to attempt to explain, basically there is a power struggle going on between two factions of the Bitcoin camp.  If you don’t know why there are two Bitcoins, better go and get an overview of forks. Both believe they are the truest and closest version of the original founders plan and computer code.  The miners, the people who use huge computers to solve the algorithm and ‘find’ Bitcoins can only mine one or the other at any one time, this means the computing power is fluctuating between the two as miners try to determine loyalty (and profitability).  One consequence of this is that time it takes to confirm a Bitcoin transaction has gone up significantly, as has the cost of the transaction fee.   This is a vicious circle because it then makes Bitcoin Cash appear to be more attractive as it boasts faster and cheaper transactions.

I’m not sure I even have the energy to opine on Parity Wallet having an amateur hacker ‘rattle their doors’ and end up freezing somewhere in the region of $400m Ethereum.  Read about it in the roundup below and I’ll bring more on it when we find out what happens next.

No-one ever said crypto was straightforward.

This Week’s Highlights

Bitcoin Cash takes off.

Off off off, like a big crypto rocket, we don’t know what is going on exactly but lots of people made a ton of money this weekend and one or two made billions. (Source)

DEUTSCHE BANK: We may be looking at ‘the start of the end of fiat money’

Deutsche Bank isn’t known for its gold bugs, but that hasn’t stopped its strategist Jim Reid from writing a paper that discusses “the start of the end of fiat money.”

Reid’s basic contention is this: The dominance of the fiat currency system since Richard Nixon decoupled gold from the dollar in 1971 “is inherently unstable and prone to high inflation,” and an offsetting disinflationary shock that kept it afloat since 1980 is now slowly reversing.

If that’s the case, Reid says the fiat currency system — a term which describes any currency whose value is backed by the government that issued it, rather than by a commodity like gold or silver — could be “seriously tested” over the next decade. (Source)

Vaneck re-enters crypto markets with first major indices

After the Securities and Exchange Commission (SEC) refused a review of Vaneck‘s exchange-traded fund (ETF) application, the company formally withdrew and went back to reassess. They’ve emerged, joining forces with Cryptocompare to offer single indexes and baskets of indexes, indices which will be the first of their kind by a major firm to track bitcoin and other cryptocurrencies.    (Source)

Parity discovers second flaw in five months

Users of the popular Parity Ethereum wallet have been left reeling after its developers revealed the discovery of a security flaw. The threat, which has been described as “critical”, renders all multi-sig contracts unusable and has locked up hundreds of millions of dollars of ether. The news couldn’t have come at a worse time for Parity, which has been battling to restore its reputation following July’s embarrassing hack which led to at least 150,000 ethers being stolen. The original theft would have been worse were it not for the actions of white hat hackers who helped to recover an additional 377,000 ethers (Source)

Tim Draper on Bitcoin: ‘In 5 years if you use fiat currency, they will laugh at you’

As Forbes report, legendary investor Draper is bullish on Bitcoin. Fiat currencies, he says, are bounded by country borders. The Nigerian Naira drops 30% when you cross the border. Outside Argentina, the country’s peso is currency non grata, and there are other countries where this is true as well. (Source)

Electroneum go offline after DDOS

The British mobile miner startup who created a huge social media buzz for their recent ICO which raised in the region of $40,ooo came under a DDOS attack only hours after launching their mining feature.  These are the guys who advertised that their platform was super secure, literally un-hackable.  Fortunately they now have enough money to employ Hackerone, who definitely know what they are doing.  Let’s hope it rubs off. (Source)

This is how the CME’s Bitcoin circuit breaker would work.

While the CME already uses daily vol limits on most other markets, including crude, gold and market futures, to temporarily halt trading when price swings get out of control, the CME has never before dealt with something like bitcoin, which in addition to being the world’s best performing asset classes in recent years, is also its most volatile. And, as the WSJ adds, it is also unclear how much impact CME’s limits will have on bitcoin, since its futures market has yet to emerge and most trading in the digital currency is on exchanges outside of CME’s control. (Source)

 The Chair of the SEC says all ICOs will have to register as Securities.

In a recent speech to an exclusive group of attorneys in New York, Walter Joseph “Jay” Clayton III, Securities and Exchange (SEC) Chairman, in prepared remarks and brief statements, equated Initial Coin Offerings (ICOs) with securities, which will mean massive regulation of a red-hot market.  This is probably bad news for investors in the short term, but ultimately offers stability and reassurance in the longer term. (Source)

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.  

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • November 12, 2017

This Week on Coin Street – 5th November 2017

Week ending November 5th, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

As I write this the price of a single Bitcoin has cruised through $7500.

Seven and a half thousand dollars each.

That is quite simply incredible.

Every threshold, resistance, trend line and projection has been smashed.  Every week I say a correction must be coming just round the corner and every week Bitcoin hits an all time high.

The train just keeps rolling.

The big story this week and probably the reason, at least in part, for the most recent surge in price is the news from the CME group that they are going to be offering Bitcoin futures as a derivative product before the end of the year. (Source).

If you don’t know who the CME are or why that’s a big deal, let me break it down for you quite simply.  The Chicago Mercantile Exchange is the worlds largest and most diverse derivatives market place.  It is bigger than any equivalent in any city including New York or London.  Every giant wall street hedge fund, every back alley trading firm, every Joe sole trading broker in every corner of the world has an account with the CME and access to their products.  Listing a Bitcoin futures product is not only unheard of, it enables access to the space like we have never seen before.

It gives everyone from retail mom and pop investors right through to giant multi billion dollar hedge funds access to Bitcoin in a safe, reliable fashion through a recognised and familiar avenue without actually ever being exposed to the complicated and often confusing world of actually buying bitcoin.  This is as big a piece of news as Bitcoin has arguably ever seen.  With the promise of this sort of exposure to the retail markets who knows what this will mean for the price longer term.

One thing is for sure there is only one game in town.  The alt coins have no choice but to sit on the sidelines and hope they get a look in soon. Bitcoin is back to 60% market dominance. The sheriff of crypto is here and he’s laying down the law.

 

This Week’s Highlights

Big name investors are backing Bitcoin

Bill Miller, former chairman of Legg Mason Value Trust mutual fund, and current chairman of Miller Value Partners LLC, has revealed that bitcoin holdings comprise approximately 30% of the assets in Miller Value Partner’s MVP 1 hedge fund.

Mr. Miller states that the MVP 1 hedge fund has gained in value by approximately 72.5% so far during 2017. (Source)

Amazon look to be accumulating crypto web addresses

Whether this actually means anything or not is speculation, it could very well just be brand protection nonetheless any mention of Amazon and crypto in the same sentence gets a lot of people very excited.   (Source)

Coinbase adds 100,000 new users in one day.

The Bitcoin surge shows no sign of slowing down.  It seems like only yesterday we were celebrating Coinbase’s 10 millionth user (fact: it was September 5th).  Now, they’re up to 12 million.  And they added 100k new accounts in a single day.  Booming.   (Source)

Canadian VC gets caught bare faced lying.

As Forbes report, Alex Tapscott’s Crypto VC Firm NextBlock Global, a venture capital company investing in digital assets that is going public in Canada and raising $100 million CAD ($77 million USD), falsely named four blockchain stars as advisors in an investor document, this however turned out to be, not to put too fine a point on it, a lie.  Oops. (Source)

Bitcoin mining is outrageously energy inefficient.

We have seen this discussed before but now one analyst has worked out that the power used to process Bitcoin transactions averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week. On a larger scale, De Vries’ index shows that bitcoin miners worldwide could be using enough electricity at any given time to power about 2.26 million American homes. (Source)

Furthermore, when using barrels of oil as the metric it doesn’t look any rosier with the total Bitcoin mining industry using 13,239,916 barrels of oil equivalent. (Source).

Norwegian mining company launches first asset backed ICO.

While the world debates whether blockchain-based Initial Coin Offerings are a fraudulent pyramid scheme, meant to take advantage of gullible investors who are desperate to get rich quick, or a revolutionary “post-equity” way of raising capital, a Norwegian mining company, Intex Resources ASA, has taken the next step and last week announced it was issuing the world’s first asset-backed Initial Coin Offering, with the resulting tokens being exchangeable for the physical collateral. (Source)

Tezos Trouble: Class action lawsuit filed against infamous ICO

The lawsuit filed in San Francisco, alleges that Tezos’ organizers violated U.S. securities laws and defrauded participants in the online fundraiser.  This could spell big, big trouble.  Other ICO’s should be looking around nervously.   (Source)

Floyd, Floyd, Hey Floyd, We’re looking at you

In a predictable development out of D.C., the SEC published a statement warning that celebrity endorsements of ICOs may be unlawful if they don’t disclose the nature, source, and amount of any compensation paid.  Does this mean that Floyd will need to get back in the boxing ring to keep the cash flowing?  (Source)

And finally, as usual, we finish with someone saying Bitcoin is a bubble.

Blah Blah Bubble Blah.  Bitcoin hit $7000  $7500 this week. (Source)

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.  

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • November 5, 2017

This Week on Coin Street – 22nd October 2017

Week ending October 22, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

Another week, another all time high for Bitcoin.  Since my update last week Bitcoin has risen another $400 topping out at $6150 at the time of writing.  This is obviously great news for Bitcoin enthusiasts and holders, but it’s bad news for alt coins.  Almost across the board, alts are down, many of them bleeding badly as value continues to be stripped out and invested in Bitcoin.

I appreciate that investors are continuing to pile into Bitcoin in the hope of benefitting from the rogue fork Bitcoin Gold but it also seems like new money is entering the space. It’s likely to be, at least in part, institutional as traditional investors and funds are no longer able to ignore the potential of Bitcoin.  In its first week trading, the first accredited investor platform Ledger X reported over a million dollars in Bitcoin derivative trades. (Source)

It is worth noting however that although the total market cap is up by almost $30 billion in only a couple of weeks, we are still around $5 billion short of the all time market cap high, which was just before the Bcash fork in August. (Source)

Although at first glance the market for Bitcoin looks Bullish, I would argue that the overall sentiment is fairly Bearish.  Alts are in free fall and there looks to be more and more shorts building against Bitcoin in the margin sites.  A correction is due in my opinion, whether it turns out to be a short term pull back or a major trend reversal remains to be seen.

This Week’s Highlights

IBM backed a little known cryptocurrency.

The tech giant unveiled the results of a new partnership with Stellar, a blockchain startup who’s currency Lumens was used to conduct real world, cross border payments.  On releasing the news the price of Lumens shot up almost 200%  (Source)

Bernanke is big on blockchain.

The former chief of the Federal Reserve Ben Bernanke, who has had a lot to say on Bitcoin in the past. Told the Swell conference in Toronto this week that blockchain technology can be used to improve global payments and that Ripple was ‘promising’. (Source)

So is Jamie Dimon.

We know he’s not a fan of Bitcoin, but JP Morgan are part of the Ethereum alliance and now Jamie has announced that they are launching their own blockchain transfer system.  (Source)

Ripple and the Gates foundation team up.

In a bid to level the economic playing field for the estimated 2 billion without a bank account in the world.  Ripple and the Bill Gates foundation announced a new software platform Mojaloop to allow for simplifying peer to peer payments for the developing world. (Source)

Japan now account for over 60% of all Bitcoin transaction volume.

Presumably some of this volume is coming from China who recently forced exchanges to close.  Already big on Bitcoin, Japan are now streets ahead in not only adoption, but acceptance. (Source)

Bitfinex bans US customers.

Bitfinex one of the worlds biggest exchanges this week told US customers to liquidate  their accounts.  Perhaps they are looking to insulate themselves form the reaches of the SEC in the future but for sure there is now one less avenue for US residents to get into Bitcoin.(Source)

Australia continue their pro-regulation stance.

Already, cautiously, in favour of Bitcoin and market regulation.  Australian senate officials introduce a bill to formally regulate exchanges and introduce mandatory KYC.  (Source)

Tezos

The Tezos project was one of the first, and most anticipated ICOs in the history of crypto.  With mindblowing tech, an incredible team and an exciting roadmap it was no real surprise when they raised $232 million in Ethereum (now estimated to be worth $400 million).  However infighting between the fund and the team has not only put the project on hold, it looks like it could tie it up in a legal battle for months to come. (Source)

And finally the family who gave up everything for Bitcoin.

This widely reported tale of Didi Taihuttu from the Netherlands will put a smile on your face.  He has sold his house and all his families worldly possessions for Bitcoin.  His family now camp in a local campsite while they wait for the investment to appreciate.   Hopefully they won’t need to wait too long!  (Source)

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.  

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • October 22, 2017

This Week on Coin Street – 15th October 2017

Week ending October 15, 2017

Your weekly roundup of all things crypto brought to you by Coin Street

Neil’s Market Wrap

It’s been a big week for Bitcoin and Ethereum.  Bitcoin hit a new all-time high above $5800 and Ethereum finally pushed past the $300 mark which has been a big resistance for the past couple of months.  As seems to happen when Bitcoin goes on a run, almost every alt coin tumbled as people exited alts and piled into Bitcoin.

Much of this rise was presumably due to investors hoping to accumulate Bitcoin Gold from an upcoming fork of the Bitcoin network.  Holders hope to benefit from the ‘airdropped’ Bitcoin Gold in the same way that Bitcoin Cash appeared on the scene over the summer. 

It also seems like there is new money entering the space.  The total market cap increasing by some $30billion only a few days.   (Editors note – the current market cap of Bitcoin alone is now more than that of Goldman Sachs and Morgan Stanley – see Zerohedge’s coverage here).

Given this influx of cash it seems like the market has accepted and priced in all the news coming out of China, Russia and elsewhere .

As far as coverage goes, it feels like the mainstream media are ramping up their reporting of the space.  We see Bitcoin headlines every day on CNBC, BBC, Reuters and all other major news outlets which all increases awareness of the space.  We have turned a bit of a corner recently.  Crypto feels accessible and comfortable right now, people are interested, taking notice and starting to explore the space. It’s great to see and I’m excited to be a part of it as always.

This Week’s Highlights

Hackers broke into Amazons cloud and used it to mine Crypto.

Is this the new cyber-crime of the future?  Hackers choosing not to go after your personal data, but rather just use your computing power?  Only time will tell, but its not the first time recently we’ve seen reports of sneaky attempts to mine crypto.  (Source)

The Island nation of Vanatu offers a full citizenship for 44 Bitcoin

Gimmick?  Marketing ploy?  Who knows, but it’s certainly another example of national-level government acknowledging that crypto has value.  (Source)

Russia had some mixed messages this week

First with the news that they were going to ban websites offering crypto.  (Source)

But then seemingly softening the tone with this story of Putin leaning towards regulation and advising caution.  (Source)

The first Ethereum ETN listed on the Stockholm Nasdaq.  

That’s pretty big news.  (Source)

And also in Sweden, the authorities accepted payment of a debt in Bitcoin

Presumably thus recognising it as an asset.  (Source)

Coinbase is now offering US customers instant purchases from a bank account

This is huge news as it speeds up the purchase process by several days and makes it very much more accessible.  (Source)

The IMF’s Christine Lagarde talks big on Blockchain.

The chair of the IMF doubled down on her previous comments regarding the crypto space and said that Central banks better start getting serious about the technology.   That’s a pretty strong statement from a real-world financial heavyweight.  (Source)

And finally there’s Jamie Dimon

The JPMorgan CEO launched another attack on Bitcoin, adding that it was the last time he’d discuss the issue.  The very next day, he went back for more.  Again see Zerohedge’s coverage here

 That’s a Wrap

That’s all for this week.  It’s a fast moving space.  They say one week in crypto is a year in the real world.  

Can we ask one favor please?

Please share “This Week on Coin Street” on Facebook or send to a friend by Email.

See you next week.

  • Neil
  • October 15, 2017

Full transcript of Christine Lagarde’s speech on fintech and Central Banking at the Bank of England conference on 29/9/17

Central Banking and Fintech—A Brave New World?

September 29, 2017

Governor, Distinguished Guests, Ladies and Gentlemen—Good morning!

Thank you, Mark [Carney], for that kind introduction, and thank you to the Bank of England for inviting me to this wonderful event.

This is a moment to celebrate 20 years of independence during which the Bank of England has been a stabilizing force for the U.K. economy, inspiring others in the world of central banking—not least because of your guidance, Mark.

This is also a moment to learn from our experiences, build on the progress made so far, and look into the future—to the next 20 years—as our journey continues.

This morning, I came up Fleet Street, which always feels like a journey through history. In the Middle Ages, that street was an important center of commerce, much of which has now moved online. By the 19thcentury, the street was home to ticker machines and reporters racing each other to make the evening papers. That world, too, has largely moved online.

And much has changed for the bankers and policymakers here in the City of London. But that is only the beginning. Let us spin the hands ofBig Ben forward to 2040 to catch a glimpse of their world. We might see that:

· Cars have disappeared, because people are moving about in hovering drones, or “pods,” which elegantly avoid each other in the morning rush hour.

· One of those pods carries the central bank governor, who recently started her second term. As part of her morning routine, she swipes through a hologram of news videos curated by a digital assistant, before arriving at Threadneedle Street.

· The governor disembarks, walks up to the columned façade, opens the door and…

Who will she encounter inside the building? Are there economists sitting at desks, debating policy choices around a table? Or is there an intelligent machine making decisions, setting rates, and issuing money?

In other words, how will fintech change central banking over the next generation?That is the focus of my remarks today.

I would like to consider the possible impact of three innovations—virtual currencies,new models of financial intermediation, and artificial intelligence.

Some of these innovations have already found their way into our wallets, smartphones, and financial systems. But that is only the beginning.

Are you ready to jump on my pod and explore the future together? As one of your fellow Londoners—Mary Poppins—might have said: bring along a pinch of imagination!

1. Virtual currencies

Let us start with virtual currencies. To be clear, this is not about digital payments in existing currencies—through Paypal and other “e-money” providers such as Alipay in China, or M-Pesa in Kenya.

Virtual currencies are in a different category, because they provide their own unit of account and payment systems. These systems allow for peer-to-peer transactions without central clearinghouses, without central banks.

For now, virtual currencies such as Bitcoin pose little or no challenge to the existing order of fiat currencies and central banks. Why? Because they are too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable. Many are too opaque for regulators; and some have been hacked.

But many of these are technologicalchallenges that could be addressed over time. Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.

Better value for money?

For instance, think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country—such as the U.S. dollar—some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0.

IMF experience shows that there is a tipping point beyond which coordination around a new currency is exponential. In the Seychelles, for example, dollarization jumped from 20 percent in 2006 to 60 percent in 2008.

And yet, why might citizens hold virtual currencies rather than physical dollars, euros, or sterling? Because it may one day be easier and safer than obtaining paper bills, especially in remote regions. And because virtual currencies could actually become more stable.

For instance, they could be issued one-for-one for dollars, or a stable basket of currencies. Issuance could be fully transparent, governed by a credible, pre-defined rule, an algorithm that can be monitored…or even a “smart rule” that might reflect changing macroeconomic circumstances.

So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.

Better payment services?

For example, consider the growing demand for new payment services in countries where the shared, decentralized service economy is taking off.

This is an economy rooted in peer-to-peer transactions, in frequent, small-value payments, often across borders.

Four dollars for gardening tips from a lady in New Zealand, three euros for an expert translation of a Japanese poem, and 80 pence for a virtual rendering of historic Fleet Street: these payments can be made with credit cards and other forms of e-money. But the charges are relatively high for small-value transactions, especially across borders.

Instead, citizens may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash—no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities. If privately issued virtual currencies remain risky and unstable, citizens may even call on central banks to provide digital forms of legal tender.

So, when the new service economy comes knocking on the Bank of England’s door, will you welcome it inside? Offer it tea—and financial liquidity?

2. New models of financial intermediation

This brings us to the second leg of our pod journey—new models of financial intermediation.

One possibility is the break-up, or unbundling, of banking services. In the future, we might keep minimal balances for payment services on electronic wallets.

The remaining balances may be kept in mutual funds, or invested in peer-to-peer lending platforms with an edge in big data and artificial intelligence for automatic credit scoring.

This is a world of six-month product development cycles and constant updates, primarily of software, with a huge premium on simple user-interfaces and trusted security. A world where data is king. A world of many new players without imposing branch offices.

Some would argue that this puts a question mark on the fractional banking model we know today, if there are fewer bank deposits and money flows into the economy through new channels.

How would monetary policy be set in this context?

Today’s central banks typically affect asset prices through primary dealers, or big banks, to which they provide liquidity at fixed prices—so-called open-market operations. But if these banks were to become less relevant in the new financial world, and demand for central bank balances were to diminish, could monetary policy transmission remain as effective?

If anything, central banks may well have to increase the number of counterparties to their operations. The Bank of England is already leading the way by including large broker-dealers and central counterparty clearing houses.

All this, of course, has regulatory implications. More counterparties imply more firms falling under the central bank’s regulatory umbrella—which is the price to pay for liquidity on a rainy day. Whether the future holds more or less rain is an open question. Still, better regulating shadow banks looks all the more pressing. The FSB has already made progress in this area under your leadership, Mark.

The remit of central banks will grow, and with it, perhaps, public scrutiny and political pressures. Independence—at least to set monetary policy—will need further defenses and require even clearer communication.

We may also see a shift in regulatory practices. Traditionally, regulators have focused on overseeing well-defined entities. But as new service providers come on stream in new shapes and forms, fitting these into buckets may not be so easy. Think of a social media company that is offering payments services without managing an active balance sheet. What label should we stick on that?

All this is good for lawyers, but not so good for regulators. The regulators will likely have to further expand their focus, from financialentities to financial activities—while possibly also becoming experts in assessing the soundness and security of algorithms. Easier said than done.

Cooperation is key

To make things smoother—at least a bit—we need dialogue. Between experienced regulators and those regulators that are just beginning to tackle fintech. Between policymakers, investors, and financial services firms. And between countries.

Reaching across borders will be critical as the focus of regulation widens—from national entities to borderless activities, from your local bank branch to quantum-encrypted global transactions.

Because of our global membership of 189 countries, the IMF is an ideal platform for these discussions. Technology knows no borders: what is home, what is host? How can we avoid regulatory arbitrage and a race to the bottom? This is about the IMF’s mandate for economic and financial stability, and the safety of our global payments and financial infrastructure.

The stakes—and gains—from cooperation are high. We want no holes in the global financial safety net, however much it gets stretched and reshaped.

I am convinced that the IMF has a strong role to play in this respect. But the Fund will also have to be open to change, from bringing new parties to the table, to considering a role for a digital version of the SDR.

In other words, the IMF is in for the pod-ride.

3. Artificial intelligence

Which brings us to the third and final leg—the transformative effect of artificial intelligence.

Will our governor in 2040 walk into the Bank to polish a monetary policy-setting machine? Will your prediction, Andy [Haldane], of 15 million jobs being automated in the U.K., affect the Bank and its world-class staff?

One thing is clear: we always have more data. Some estimates suggest that 90 percent of the data available today was generated in the past two years. [1] This is not just information on output, unemployment and prices, but also behavioral data on the quirks and irrationalities of the homo economicus.

Thanks to smartphones and the internet, this data is now abundant, ubiquitous, and increasingly valuable as we pair it with artificial intelligence.

Artificial intelligence is taking immense strides. Over the past year, some of the world’s best players of Go, the ancient board game, have lost to a self-learning computer. For many, that day of reckoning was supposed to be decades away. The machine learned tactics, recognized patterns, and optimized its game—better than we could.

Clearly, the economy is vastly more complex than a game of Go. But over the next generation, machines will almost certainly play a larger role—in assisting policy-makers, offering real-time forecasts, spotting bubbles, and uncovering complex macro-financial links.

But let me reassure you, humans will still be needed.

For one, there is immense uncertainty about the economy. Changes in basic economic relationships need to be spotted, and risks evaluated. Judgment and constant questioning by peers, diversity of opinions, and even a few maverick spirits, will remain essential to good policy. But what if the machine could do that too?

Next is the question of communication. Good monetary policy, as we know, is about story telling. Policy is effective if it can be explained clearly so the public can form expectations about future policy. Could machines really explain their decisions in plain English?

Even if that hurdle could be overcome, a last one remains. Even with the best algorithms and machines, targets will be missed, crises will occur, mistakes will be made. But can machines really be held accountable—to the young couple unable to buy a house, to the working mother finding herself unemployed?

Accountability is key. Without it, we cannot have independence; how else to bestow so much power in a technocratic organization? And without independence, policy is bound to go astray, as this conference reminds us loud and clear.

So no, I do not see machines taking over monetary policy. In 2040, the governor walking into the Bank will be of flesh and bones, and behind the front door she will find people, at least a few.

So there will always be an Old Lady living in Threadneedle Street. [2] And I hope you agree that it is often enlightening to speak to a lady of a certain age!

Conclusion

As our pod journey comes to an end, some of you may wonder about my upbeat tone. For many, this new world of central banking is less Mary Poppins, and more Aldous Huxley: a “brave new world,” much like the one described in Huxley’s famous novel.

I believe that we—as individuals and communities—have the capacity to shape a technological and economic future that works for all. We have a responsibility to make this work.

That is why I prefer Shakespeare’s evocation of the brave new world in The Tempest: “ O wonder! How many goodly creatures are there here! How beauteous mankind is! O brave new world .”

Thank you.

 

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  • Neil
  • October 1, 2017