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$50M of ETH Stolen, ‘Rare Opportunity’ for BTC: Hodler’s Digest, Nov. 25–Dec. 1

Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

Crypto exchange Upbit confirms theft of 342,000 ETH

Another week, another hack — leaving us all with a distinct sense of déjà vu. On Wednesday, the major South Korean crypto exchange Upbit confirmed that a whopping 342,000 Ether (ETH) had been stolen from its hot wallet — funds worth an estimated $50 million at the time of writing. The company stopped short of describing the incident as a hack and said that all remaining crypto assets have since been moved into cold storage. Deposits and withdrawals are going to be suspended for at least two weeks, and Upbit said corporate funds will be used to protect user assets. In recent days, rumors have been swirling that the incident could have been an inside job.

Indian government to issue national blockchain strategy

Despite taking a hardline stance on crypto, India has announced that it is working on a national blockchain strategy to accelerate the technology’s adoption. Officials believe that blockchain could transform a plethora of sectors, including governance, banking, finance and cybersecurity. Several Indian states have already been drawing up policies relating to blockchain and artificial intelligence, including Tamil Nadu and Telangana. This month, hopes were raised in the crypto community after a controversial bill that proposes a 10-year jail term for those caught dealing in digital currencies was postponed, with lawmakers failing to introduce it during the winter session of parliament.

China: Five crypto exchanges halt or shut services amid perceived crackdown

It’s been a bad month for Chinese crypto exchanges. In November, at least five platforms have either decided to halt operations temporarily or close up shop altogether. Bitsoda and Akdex brought the shutters down within 24 hours of each other, while Idax announced domestic clients will no longer be able to use its service. Btuex also made moves to suspend services immediately, with the company directly linking this decision to government policy. Biss was the first exchange to fall silent back on Nov. 4 — and since then, it’s been reported that 10 suspects have been arrested in connection with that exchange. All of this comes amid fears that Beijing is doubling down on its anti-crypto stance.

Russia reportedly considers ban on using crypto as a means of payment

China isn’t the only one threatening to take a hardline stance on crypto. Reports this week also suggested that Russia is planning to ban cryptocurrencies from being used to purchase goods and services. Such a proposal would be a massive setback for countless Russian programmers, designers and copywriters who receive their freelance salaries in BTC and ETH. It is believed that Moscow is concerned about crime, with a senior Ministry of Finance official recently saying: “We do not see any basis for cryptocurrencies to be used as a means of payment.”

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Africa “will define” the future of Bitcoin, Twitter CEO Jack Dorsey says

After completing a tour of the continent, with stops in Nigeria and Ghana, Jack Dorsey has boldly predicted that “Africa will define the future” — especially when it comes to Bitcoin (BTC). The renowned tech entrepreneur, who is the brains behind Twitter and Square, is a huge supporter of crypto. Dorsey said he is planning to return to Africa in 2020, with a plan to spend up to six months on the continent. His enthusiasm comes as interest in BTC continues to build — especially in Lagos, Nigeria’s most populous city. In other news this week, Ghana announced it is exploring the benefits of issuing a central bank digital currency. It remains unclear when such a project would launch and whether it would be based on blockchain.

Winners and Losers

At the end of the week, Bitcoin is at $7,470.78, Ether at $151.83 and XRP at $0.22. The total market cap is at $202,919,459,515.

The top three altcoin gainers of the week are DMarket, Streamr DATAcoin and Matic Network. The top three altcoin losers of the week are Odem, Digitex Futures and Energi.

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For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“Africa will define the future (especially the bitcoin one!)”

Jack Dorsey, Twitter and Square CEO

“There are a lot of voices from the Bitcoin community saying that most of the mining is done with green energy and that it’s not high impact.”

Susanne Köhler, academic

“The ability to save wealth in bitcoin will bring millions of people out of debt.”

Misir Mahmudov, Adaptive Capital

“Beside memorising the pass phrase I also wrote it down in a book. Then now when I keyed in the pass phrase it doesn’t generate the address where I’ve sent 1800 btc to.”

Lumanubrecon, Reddit user

“If they [institutional investors] faced a situation of a renewed Bitcoin bubble and they continued to take a contrarian position against the market, they’d be throwing fiat into a black hole.”

Bitcoin educator Andreas Antonopoulos

“Nothing is above Bitcoin, no CBDC, no stablecoins.”

Blockstream CEO Adam Back

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Prediction of the Week

PlanB: “Rare opportunity” can see Bitcoin price hit $10,000 in December

As Bitcoin continues to languish in the mid-$7,000s, some analysts are optimistic that a bounce-back could be on the cards. PlanB has suggested that BTC could return to five-figure territory before 2020 — a surge that would involve the world’s dominant cryptocurrency rising by more than a third. Before you raise your eyebrows and dismiss this as an outlandish prediction, it’s worth remembering that BTC soared by a whopping 42% in a single day back in October — the second-biggest daily gain of all time. Not all analysts agree with PlanB’s rosy prediction. Another statistician, Willy Woo, forecast “a bearish December to test new lows” unless BTC managed to close the month above $8,300.

FUD of the Week

Report: Cybercriminals are using YouTube to install cryptojacking malware

New research suggests cybercriminals have been distributing a Monero (XMR) crypto mining module via the popular video-sharing website YouTube. According to Eset, a major antivirus software supplier, the malware is a marked departure from the click fraud, ad injection and password stealing attacks that Stantinko botnet operators were known for before. It is believed that approximately 500,000 devices have been infected to date. YouTube said it has since removed every channel that contained traces of Stantinko’s code.

Bitcoin life lesson: User forgets “brain wallet” worth $13 million

Now here’s a FUD that’ll make you wince. A Bitcoin investor claimed they have lost access to funds worth almost $13 million because they failed to record the passphrase for their wallet. The Reddit user said a balance of 1,800 BTC is out of reach. They were apparently using something known as a “brain wallet” — a form of Bitcoin storage that often does away with physical and digital records of passphrases. Instead, users create a password that is easy to recall but difficult to crack. As compelling a story as it might be, some are skeptical as to whether it’s actually true. One moderator, who has marked the tale as likely fake, said: “Why is it called a ‘brain’ wallet when anyone with an actual brain would never do something so stupid? The story is so dumb I assume it is not real.”

Ex-Hollywood executive admits to embezzling $22 million to buy crypto and gamble

A former executive at a digital marketing firm in Hollywood is in hot water after admitting to embezzling $22 million from his employer to buy digital currency, gamble and cover personal expenses. Dennis Blieden was working for StyleHaul Inc. at the time, an agency that represents “influencers” on social networks. Over a four-year period, he stole $1.2 million to write personal checks to poker players, $1.1 million to pay off credit cards and $8.4 million to transfer to crypto accounts. Blieden is now facing a statutory maximum sentence of 22 years in federal prison.

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Best Cointelegraph Features

BRICS nations discuss shared crypto to break away from USD and SWIFT

Brazil, Russia, India, China and South Africa — collectively known as the BRICS economic bloc — are exploring whether they should issue cross-national digital money to reduce their dependence on the United States. Julia Magas has more.

Blockstream CEO: “Nothing is above Bitcoin, no CBDC, no stablecoins”

In an exclusive interview with Cointelegraph, Blockstream CEO Adam Back said stablecoins and other coins issued by central banks will never be above Bitcoin. Here’s Cassio Gusson.

Here’s where to spend crypto online this Black Friday

It’s one of the biggest events in retail: Black Friday. But where can crypto enthusiasts spend their coins and get their hands on the latest bargains? Aubrey Hansen takes a look.

What the HEX: A Look at Richard Heart’s Controversial New Crypto

HEX is a new financial tool and cryptocurrency launching on the Ethereum network via a Bitcoin UTXO snapshot on December 2. Critics are questioning HEX’s legitimacy, calling it a colossal cash grab and privacy compromise. Devout fans can’t wait to claim their tokens and start staking. So who’s right and who’s wrong?

Richard Heart, the outspoken man behind HEX, sat down with Cointelegraph to talk about the upcoming launch and counter a few of the criticisms surrounding the project. 

Heart explained that HEX is the world’s first high-interest blockchain certificate of deposit (CD), letting users stake their tokens in return for interest. Users can enjoy interest payments ranging from 3.69% if 99% of the total supply is staked, up to an improbable and enormous payout of 369% if only one percent of the total supply is staked — paid out in HEX tokens. It’s worth noting that the monetary value of such a payout depends entirely on the market value of HEX at the time of maturity.

“It’s the world’s first blockchain CD that attacks the largest market in the banking ecosystem outside of savings accounts,” Heart said.

Move over, big banks?

HEX is essentially a crypto version of the traditional fixed deposit. The client-side looks like the popular banking instrument: a user locks up funds, then receives their invested principal plus interest when the term matures. 

“Banks use your money as a sort of collateral that’s just an excuse for them to borrow money from the government at extremely low rates,” Heart said.

HEX fixes this…

Meanwhile, Bitcoin has some serious limitations, Heart explained. “What does Bitcoin do? It lets you enter a number on your screen which changes the number on someone else’s screen. It makes sure nobody does that twice by burning millions of dollars in electricity.” 

Of course, the cost to secure a single such transaction is far from millions of dollars, but Heart has a soft spot for hyperbole.

Heart said Bitcoin prices can spiral downward due to miner competition, causing difficulty to spike to all-time highs while the market price dwindles. Miners have to keep selling more of their newly minted coins, and thus continue to push the price further down. Heart neglected to mention Bitcoin’s difficulty adjustment system, which finds an economic balance between mining costs and monetary rewards.

Rather than losing against inflation, HEX users earn it by locking up coins, Heart said. People are competing against each other for larger and longer stakes, starting as early as possible, in order to get a larger piece of the profits. “If you end your stake early or late,” he said, “you’re penalized.” Only users who don’t lock their coins suffer from inflation because they’re not letting the rest of the world know when they will sell them. ”It’s a truly unique system. It’s the first of its kind,” Heart beamed.

Heart complains that Bitcoin’s system still has critical bugs that aren’t solvable by wasting more electricity. “Bitcoin’s security model burns millions of dollars but starves developers of money, has no security audits, and no bug bounty.” Heart continued by pointing to the decline in wider Bitcoin adoption: “Fewer people accept it, it has fewer addresses, fewer Google searches, only minor upgrades besides SegWit… Lightning only has $6 million in total, and also has critical vulnerabilities from time to time.”

Heart explained that HEX solves these problems. “It does everything Bitcoin does, but better, except liquidity, but that’s because it’s brand new.” First, Heart pointed out that users can profit from referrals. 

Secondly, lending BTC in the hopes of making interest requires trust, whereas HEX does not, Heart said: “To earn money on your Bitcoin, you have to lend it out to a counterparty and hope that you ever see it again. With HEX, you lock it in a smart contract. It’s trustless interest.”

This programming is secure, he explained, since the consensus code that controls the inflation and validity of coins is locked in a smart contract. Developers can’t accidentally generate a bug, he said. “But in Bitcoin, if you try to improve the network anywhere, your changes touch the consensus code. That’s how that last inflation bug got accidentally put in there.” Heart compared such a change to upgrading an airplane’s software while it’s in the air — a dangerous, difficult task.

10% of the world will hate you

Many criticisms aimed at HEX focus on Heart’s potential to make the lion’s share of profits from the scheme. The origin address, an element of the scheme that users are obliged to trust, receives a massive portion of claimant bonuses. “Whoever holds the keys to the origin address is going to be happy,” Heart said with a chuckle.

When asked for his thoughts on HEX, Cryptoconomy podcaster Guy Swann took the question to his listeners. “I started a thread in our Cryptoconomy Telegram group and it got out of control, fast,” Swann said. “I can’t believe how this thing is set up. Its core design could make it one of the most prolific schemes to funnel money to a single party that I’ve seen in the crypto space.” Swann expressed further concerns, comparing it to OneCoin in its “brazen means of aggregating vast sums (upwards of two-thirds) of all invested ETH and HEX supply under a single entity’s keys.”

Swann explained, “To get HEX after the airdrop, you participate in an ‘Adoption Amplifier,’ which makes a game out of bidding on new HEX tokens by sending ETH into a ‘pool’. That ETH then goes directly to Richard…” Swann concluded, “Everything in this ridiculous token is designed to look like a game and encourage gambling. But the one universal factor in every game element is that Richard gets wealthier and you get a worthless token that he invented for free…”

Others have fired criticisms at Heart for HEX’s purportedly Ponzi-like structure, as well as for privacy and security concerns regarding its claiming process. Vlad Costea, a writer at Bitcoin Magazine, presented a range of arguments against HEX’s purported legitimacy, calling it a scam back in January 2019 when it was originally branded as “Bitcoin Hex.”

Costea wrote: “Bitcoin Hex resembles a Ponzi scheme…”  He criticized the project as a sort of “fool’s gold,” promising to “make everybody richer at the expense of a simple sign-up process.” The writer also pointed to privacy concerns regarding the claiming process.

During the launch phase, anyone holding Bitcoin can claim 10,000 HEX for each Bitcoin stored in a wallet address. Costea wrote, 

“People watching the weekly interviews and understanding the process will probably think that they have nothing to lose. But the price to pay is privacy itself, as participants to the Hex scheme willingly reveal to the public how many bitcoins they own (unless they obfuscate their transaction history with a tool like Wasabi wallet, that is).”

Following a barrage of criticisms fired at HEX, Costea concluded that the tokens will have no value, with gullible traders left handing over their valuable crypto gold for worthless stones.

The project uses “tactics a scam might use”

Heart justified the design of HEX’s payment system: “The market sets the price. If no one wants in, the price will be nothing.” He took a lighthearted approach in handling critiques of outright fraud: “So there’s this trustless thing that people can use — or not — and pay what the market says it’s worth — or not. Scam!”

Heart elaborated: “I don’t care who you are, 10% of the world will hate you. In crypto, there’s a tribalism that every coin you buy is a world-changing amazing thing. Every coin anyone else buys is a scam by default.”

He also responded to critics bemoaning his financial success and profit-seeking motivations: “They’re closet socialists. They say, ‘I’m poor, so I want you to be poor, too.’”

Heart addressed the issues surrounding privacy and security, saying “every HEX claim is safe and secure.” For extra anonymity, users can claim each “BTC Freeclaim” to a new ETH address over TOR and click “new circuit” after each claim. Heart said, “I don’t know your IP. I don’t know your name. I know the public address that has claimed HEX. It’s like knowing you have a front yard and people can see your front yard.”

Heart continued: 

“I don’t want your data. If I wanted to know your IP address, I could set up a Bitcoin node and just listen, or I could buy a wallet company or make an app. It’s so stupid.”

Heart has extremely ambitious hopes for the project, envisioning HEX “overtaking all other cryptocurrencies… and onboarding people in the real world.” He explained the project uses “tactics a scam might use,” like referral bonuses, in order to attract interest — but offers an honest, real project.

There is no doubt that Heart is a master marketer and salesman. He appears to be genuinely passionate about the project, aiming to recreate the early days of free mining, $1 Bitcoin, and massive profits for the fortunate few. Exactly how few will benefit from HEX is yet to be determined.

Bitcoin Fails to Break $7.8K and Now Risks Reversing to New Lows

Whereas Bitcoin (BTC) was hovering at $6,500 earlier this week, it has since rebounded to the resistance zone of $7,800 but failed to break it on the first attempt.

Crypto market daily performance

Crypto market daily performance. Source: Coin360

As the short term trend is still upwards, should traders be cautious about the recent price action? Let’s take a look at the charts. 

Bitcoin still inside the downwards channel

The more notable timeframe — the daily in this case  — is still showing a downward trending channel since the top at the end of June 2019. 

BTC USD daily chart

BTC USD daily chart. Source: TradingView

This downwards trending channel is still active as the price bounced back from the “support” line and the 0.618-0.65 golden ratio Fibonacci level earlier this week. 

The green zone around $6,500-6,800 can still be seen as a significant support level here, while the upwards red/yellow area is showing significant resistance. The resistance area is in the $8,000-8,200 zone, which is also around the trendline of the downwards channel.

The total crypto market cap rejected at first resistance

Total crypto market capitalization daily chart

Total crypto market capitalization daily chart. Source: TradingView

The total market capitalization of crypto is showing a similar view as BTC/USD at this point. The market cap held the green zone as support — which is crucial — but couldn’t break the first resistance. 

The overall market cap chart often provides a more unobstructed view than Bitcoin regarding price movements and, in this case, is also showing some clear signals. 

Total market capitalization chart

Total market capitalization chart. Source: TradingView

In this regard, the price retraced to the earlier resistance in April of this year. 

Currently, the price has tested whether that level can be confirmed support and did just that with a bounce from $175 to $207 billion. However, the first resistance at $207 billion was rejected, which suggests a potential retest of the purple area is in order. 

If the purple area manages to hold, the total market capitalization is moving inside a vast falling wedge pattern, which is likely to break out in January 2020.

First resistance rejected at smaller time frames

BTC USD 4 hour chart

BTC USD 4 hour chart. Source: TradingView

The BTC price has seen a surge of $1,300 during the week from $6.5K. However, it was not able to break through the next resistance at $7,800. But why is this a key resistance level? 

The left side of the chart shows that the price bounced several times at this support level before it broke down. Such a level is a reference point for traders looking for selling opportunities (or opening shorts), and thus, the price reversed and confirmed the $7,800 level as resistance. 

Before this test occurred, the price first flipped the $7,350-7,400 resistance into support. In this regard, the price is now stuck in a range, where these numbers are now defining the bounds. 

Is that bad? No, the price has been hovering inside such a range for the entire month of October before volatility kicked in

Bullish scenario

BTC USD bullish scenarioBTC USD bullish scenario. Source: TradingView

Now, several scenarios can be classified as bullish or bearish on multiple timeframes. As long as $7,350-7,400 remains support in the near term, another push towards the red/yellow area can occur with a target of $8,000-8,300.

Personally, I am not expecting to see an immediate breakthrough as that would be the first attempt to be testing this resistance. Usually, resistances don’t get broken on the first attempt. 

For the bulls, breaking and flipping this $8,000-8,300 level into support would be ideal, which would also cause the price to break out of the downtrend. If the price is not able to do this, it will continue to move within this downwards channel. 

Bearish scenario 

BTC USD bearish scenario 1

BTC USD bearish scenario 1. Source: TradingView

Now, I will explain multiple bearish scenarios as a few different ones are possible. The first scenario is a breakdown towards $7,350-7,400 area for a test of support (as that’s a significant support area). 

A potential weak bounce to $7,700 can occur from this level of support, which I’d classify as a short opportunity before the price is ready to break downwards to $6,900-7,000 area.

BTC USD bearish scenario 2

BTC USD bearish scenario 2. Source: TradingView

The second bearish scenario is classified as bearish and bullish at the same time. Why? Well, if the price can hold the $7,350-7,400 and bounce significantly from it, another push to the upper resistance zone can be expected.

However, if the price is not able to break through $8,000-8,300 again, then that would be a great short opportunity before another move down towards $7,000. 

In this case, some more upward momentum could occur. Though, I’d be personally looking to short rather than long here at these levels should this scenario play out. 

Conclusion

As a whole, recent price action has presented a nice v-shaped bottom that occurred at the $6,500 level through which the 0.618-0.65 Fibonacci level and trendline held up.

However, does it mean that the downwards pressure is over for now? I don’t think so. To confirm a bottom, I will be expecting some more backtests of lower levels in the $6,900-7,000 region (green zone) in the coming months.

Nevertheless, the macro perspective is still bullish, and in this regard, I still see this retracement as a macro “buy the dip” opportunity if the green zone around $6,500-6,800 can hold. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Coinbase Denies Report of $150M Acquisition of Tagomi Brokerage Firm

Coinbase, a major American cryptocurrency exchange and wallet service, has not acquired digital currency brokerage firm Tagomi.

On Nov. 29, sources told CoinDesk that Coinbase acquired Tagomi for $150 million that morning, following purported negotiations between the firms last month. According to The Block, Tagomi’s lending and borrowing services made it a tempting target for an acquisition.

Responding to Cointelegraph’s request for comment on the purported acquisition, Coinbase VP of communications Rachael Horwitz simply said, “100% false.”

Tagomi had reportedly been targeting more retail trading clients, high-net-worth individuals and active traders in recent months, which put it in competition with Coinbase’s professional offering, Coinbase Pro. A hypothetical merge would thus help Coinbase Pro enhance its share in the cryptocurrency market. 

Tagomi expands its services

Tagomi, meanwhile, has been actively expanding its services. The firm recently partnered with Binance’s cryptocurrency trading platform for United States-based users, Binance.US. The cooperation enables Binance.US to offer institutional liquidity for Tagomi’s users, including quant funds, venture funds, family offices, individual retirement accounts and high-net-worth individuals.

In September, Tagomi enabled its users to lend or borrow Bitcoin (BTC) and Ether (ETH) to facilitate long or short trades.

Tagomi also secured a BitLicense from the New York State Department of Financial Services in late March, which made it legally authorized to trade virtual currency assets and to engage in money transmission in the state.

This spring, the firm secured $12 million in a funding round with investors including the Paradigm Fund and crypto industry giant Pantera Capital.

IRS Not Infringing Privacy Requesting Crypto Exchange Data: US Judge

A California federal court has affirmed the validity of the United States Internal Revenue Service’s (IRS) request for data from crypto exchange Bitstamp in connection with an individual tax reporting case.

Per a Nov. 25 filing, the court has found that five of the six arguments presented against the IRS “lack merit,” but has conceded on one point that the tax agency’s summons was indeed overbroad, as the Petitioner contended. 

The filing relates to court proceedings initiated by William Zietzke, who has argued that the IRS is overstepping its remit in conducting an audit of his tax returns.

Petitioner alleges privacy infringement, ‘bad faith’ and irrelevance

As the filing outlines, Zietke had initially informed the IRS of his own mistake in a tax return that had allegedly overestimated his long-term capital gains in 2016. 

In seeking a refund from the IRS to correct his error, the agency set out to investigate Zietke’s case, requiring him to provide extensive data on his history of Bitcoin holdings and transactions.

Zietke is alleged to have failed to inform the IRS of his use of crypto exchange Bitstamp, prompting the agency to summon data from the exchange about his holdings, as well as public keys and blockchain addresses associated with his transactions.

As the court outlines, Zietzke has questioned the IRS’ actions on six grounds; firstly, that it issued the summons to Bitstamp “in bad faith”; secondly, that it seeks data that is irrelevant to its audit of the Petitioner’s reporting; thirdly, that it already possesses the information that it seeks from Bitstamp. 

Zietzke’s three subsequent arguments claim that the IRS allegedly made administrative missteps and — more crucially — has violated his reasonable expectation of privacy in Bitstamp’s records. He has also argued that the U.S. government cannot guarantee the security of any records it receives from the crypto exchange.

Court concedes one of six arguments against the IRS

The California court has conceded only one of Zietke’s arguments, noting that he is “correct that the summons is overbroad because it seeks both relevant and irrelevant material.” 

The court states that the IRS’ summons would require Bitstamp to produce data that is without due temporal limitation:

“Relating to Petitioner’s Bitcoin sales prior to 2016—even though such sales could not impact the gain or loss Petitioner realized if he sold Bitcoins in 2016. In this way, the summons requests information that is irrelevant to the IRS’s stated purpose of auditing Petitioner’s 2016 amended return.”

The court has however refuted all other arguments, finding that the validity of the IRS’ summons fulfills legal precedents and supports the agency’s role in enforcing the tax consequences of crypto transactions. 

As reported, Zietke has made a similar attempt previously to quash an IRS summons issued to Coinbase, which was strongly contested by the IRS.

KPMG Launches DLT Supply Chain Tool in Australia, China and Japan

Big Four audit firm KPMG has officially launched a blockchain-based track and trace platform in Australia, China and Japan. Dubbed KPMG Origins, the tool is designed to increase transparency and traceability of processes in multiple industries such as agriculture, manufacturing and financial services, the firm announced on Nov. 28.

The official launch of KPMG Origins in Australia, China and Japan comes after successful pilot implementations with clients in those countries, the press release notes.

Trial participants include Cane Growers and SunRice

Incorporating a number of emerging technologies like blockchain and the Internet of Things, KPMG Origin intends to improve supply chain processes. The platform enables trading partners to communicate product data across their supply chains to end users while reducing operational complexities, KPMG stated.

KPMG Origins’ trial participants include the SunRice, one of Australia’s largest branded food exporters, Canegrowers, a peak body for Australian sugarcane growers, and vineyard Mitchell Wines.

Blockchain tech to help meet the increasing demand for sustainability

Matt Kealley, senior manager at membership engagement and innovation at Canegrowers, noted that blockchain technology has the potential to help meet the increasing demand on farmers to demonstrate their sustainability practices:

“A blockchain solution, such as KPMG Origins, could provide a platform which will enable end-users to capture the sustainability credentials of the product directly from the grower to customer.”

Conversely, an agribusiness exec at PwC recently argued that blockchain gives an illusion of traceability to supermarket chains and consumers, noting that physical points of entry are not necessarily foolproof.

Big Four auditors have expressed strong interest in blockchain

As previously reported, all the Big Four companies — Deloitte, PwC, EY and KPMG — have expressed strong interest in blockchain technology implementations. As the firms’ public and private audits have reportedly accounted for more than 50% global audits in 2018, the Big Four’s activity in crypto and blockchain could indicate the state of global blockchain adoption.

As such, one of the most recent blockchain implementations among the firms is EY’s blockchain platform for public funds, which launched in mid-October. Previously, PwC partnered with ConsenSys-backed identity management protocol uPort to develop blockchain-based identity management in the United Kingdom’s financial sector.

Antonopoulos: Cash-Settled Bitcoin Futures Traders Face ‘Black Hole’

Bitcoin (BTC) educator Andreas Antonopoulos says that while futures markets may indeed place a damper on the cryptocurrency’s price, the stakes are different to what you might think.

In a Nov. 27 interview with YouTuber “Ivan on Tech,” Antonopoulos argued against the grain of commonplace fears about the adverse price impact that Bitcoin futures trading has on spot prices. 

He suggested it’s the speculators — not the HODLers — who truly have something to fear.

It’s not conspiracy: “it’s the Treasury’s job”

Cash-settled Bitcoin futures — which have been trading since December 2017 on both the Chicago Mercantile Exchange (CME) and Chicago Board of Exchange (CBOE) —  have consistently drawn suspicion from traders and analysts, with many contending that Bitcoin’s price is vulnerable to manipulation in advance of contract settlements.

Anontonpolous started the discussion by conceding these fears are likely true:

“We know for a fact that when the Bitcoin bubble started to go up really fast in 2017, the U.S. Treasury decided to fast-track the deployments of futures markets in order to stop that bubble.

A lot of people see that as conspiracy, but if you look at the mandate of institutions like the Treasury, that’s actually their job.”

Price suppression, he claimed, is not a matter of conspiracy, it’s a market-based approach to enable those who don’t believe in cryptocurrencies to take a contrarian position by shorting. 

This has, of course, put a damper on the price, he said — but it’s also reduced volatility. 

A market comprised purely of positive believers — or at least those willing to hold the coin itself — is going to be very “one-sided,” he noted. “It’s not really a market with full liquidity on both sides of the order board.” 

Ironically, naysayers who had once decried volatility are now decrying futures “manipulation,” he quipped.

Unlimited risk

Importantly, Antonopoulos said, futures critics often overlook the real stakes of cash-settled cryptocurrency shorting. 

There’s something “really dangerous about doing cash-settled naked shorts against a cryptocurrency,” for when you borrow Bitcoin as part of a short, your liability — your potential risk — is unlimited:

“If they [institutional investors] faced a situation of a renewed Bitcoin bubble and they continued to take a contrarian position against the market, they’d be throwing fiat into a black hole.”

As reported, Intercontinental Exchange (ICE)’s Bakkt platform has recently confirmed its forthcoming launch of a cash-settled Bitcoin (BTC) futures contract. 

The new product will be settled against data from Bakkt’s existing physically-delivered Bakkt Bitcoin (USD) Monthly Futures contract — a pioneering product that was the first to give futures traders direct exposure to the underlying cryptocurrency.

Bitcoin Price Blasts Through Key $7.4K Resistance – Next Target $8.1K

Since dropping below the descending channel on Nov. 25, Bitcoin (BTC) has reclaimed $7,000, cleared some hefty resistance at $7,400 and now made its way up to above $7,500 by press time.

Crypto market daily performance. Source: Coin360

Crypto market daily performance. Source: Coin360

The 111-day moving average (DMA) and the 128-DMA are currently in the process of converging to form a bear cross, an occurrence which last happened on Apr. 30 when the moving averages crossed at $5,150.

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

Investor sentiment remains muted as traders are unsure whether Bitcoin price has found a bottom yet but the technical setup is clearly improving on the shorter timeframe.

Despite this, the Crypto Fear and Greed Index shows sentiment still in the extreme fear zone. One would expect this figure to improve if the daily candle closes above the resistance at $7,350.

Fear & Greed Index. Source: alternative.me

Fear & Greed Index. Source: alternative.me

Willy Woo’s Bitcoin Network Value to Transactions (NVT) Signal also provides some insight into Bitcoin’s current price action. The indicator attempts to identify market tops and bottoms by signaling overbought and oversold conditions. According to Woo, any NVT level above 145 is overbought and an NVT reading below 45 is oversold.

Bitcoin NVT Signal. Source: Woobull.com

Bitcoin NVT Signal. Source: Woobull.com

Currently, the NVT indicator reading is 64.6. The chart also shows that during bull markets, the BTC price has remained above the 200-DMA. Given that price has a history of bouncing off the 200 daily and weekly moving average, the most recent drop to $6,500 may have been a good time to open a Bitcoin position.

The Bitcoin price is now below the 200-DMA ($9,403) and the chart shows price pulling closer to the realized price at $5,649. Readers will also notice that during periods of consolidation Bitcoin price rides along with the 200-week moving average, which is currently at $4,878.

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

As shown by the daily chart, Bitcoin’s drop below the descending channel brought the price to $6,570, a price last seen on May 13. Below $6,570 there is a volume gap until $5,666 since this point was a part of Bitcoin’s parabolic rally from $4,000 to $13,800.

The volume profile visible range (VPVR) shows buying interest in the $5,500 to $5,100 area. Notice that Woo’s Bitcoin NVT Signal currently shows a realized price of $5,649 and the 200-WMA is at $4,878, a point of interest on the VPVR.

For the doomers calling for a visit back to 2019 lows, the 161.80% Fibonacci extension at $4,000 would be a total retrace of the parabolic move that took Bitcoin price to $13,800 on June 26.

It seems unlikely that Bitcoin price will drop to these levels but a similar conclusion made last week proved many investors wrong and it’s always good to consider bullish and bearish scenarios. One would like to think that a drop to $5,500 will be avoided if bulls can keep the price above $7,300 and $6,700.

Bullish scenario

If Bitcoin can hold the $7,075 support and avoid dropping below the descending channel trendline at $6,712, investors may feel that the digital asset has bottomed and begin to open long positions in the current range.

From a momentum traders’ point of view, the price has completed the cycle of touching the upper trendline of the descending channel and also the bottom trendline so once further confirmation of a price bottom is provided, swing traders will probably consider entries within the current range.

Traders entering long positions without leverage are likely anticipating an 18% to 25% gain, assuming Bitcoin slowly works its way back up to the main trendline of the descending channel.

Some traders have also noted that if Bitcoin can gain above $7,300, this would complete the inverse head and shoulders pattern and possibly send the price to the middle support of the descending channel which aligns with the $7,800 resistance — a high volume node on the VPVR.

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

At the time of publishing, bulls are fighting to keep Bitcoin price above $7,400 and the daily relative strength index has bounced sharply from oversold territory. The moving average convergence divergence (MACD) line has also begun to curl up toward the signal line as selling pressure abates and traders will notice that a bull cross has already taken place on shorter timeframes.

BTC Daily MACD, RSI, Stoch chart. Source: TradingView

BTC Daily MACD, RSI, Stoch chart. Source: TradingView

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

According to the volume profile visible range, Bitcoin could gain to $7,800 to $8,000 before encountering significant overhead resistance. This level also lines up with the moving average of the Bollinger Band indicator, which is currently at $8,100.

Currently, bulls have shown some strength and are pushing Bitcoin price closer to the $7,800 resistance. Traders will be looking for Bitcoin to close above the former support turned resistance at $7,400 and it’s possible that previous supports at $7,800, $8,200, $8,530, and $9,000 will also present themselves as resistance. Gains above $8,500 would place Bitcoin price above the 200-DMA.

The views and opinions expressed here are solely those of the author (@HorusHughes) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Crypto Exchange UpBit Confirms Theft of 342,000 Ether — $50M

Major South Korean cryptocurrency exchange — run by a subsidiary of Korean tech giant Kakao — has notified users of the theft of 342,000 Ether (ETH) from its hot wallet.

The incident was confirmed in an official statement written by Lee Seok-woo, the CEO of Upbit’s operator, Dunamu, on Nov. 27.

Upbit will use corporate funds to protect user assets

In his statement, Lee Seok-woo revealed that:

“At 1:06 PM on November 27, 2019, 342,000 ETH (approximately 58 billion won) were transferred from the Upbeat Ethereum Hot Wallet to an unknown wallet. Unknown wallet address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.”

Apologizing to users for any “inconvenience” caused, the CEO outlined measures by the exchange taken after it detected the incident while stopping short of calling it a “hack.”

The exchange has pledged to protect user assets, stating that the 342,000 ETH (roughly $50 million by press time) will be covered by corporate assets. It has already moved all crypto assets held in its hot wallet to cold storage.

Deposits and withdrawals will take at least two weeks to resume, with Lee Seok-woo promising to inform users as soon as they reopen. 

The CEO further indicated that all other recent large-scale transfers were not abnormal, but were related to the exchange moving assets between hot and storage facilities.

Active threats

In March of this year, Upbit and local cybersecurity firm East Security alleged that a phishing scam targeting its users had been perpetrated by hackers from North Korea

In January 2018, South Korea’s four largest crypto exchanges — Bithumb, Upbit, Coinone and Korbit — created a hotline for major exchanges to ensure suspicious transactions could be detected and frozen immediately after being disclosed.

Bithumb has to date suffered three major security breaches, most recently in March of this year.

US CFTC Obtains Over $1.3B in Administrative Penalties in 2019

The United States Commodity Futures Trading Commission (CFTC) has obtained over $1.3 billion in administrative penalties in the fiscal year 2019, which included funds collected from cryptocurrency operators.

According to the CFTC’s annual report for the 2019 financial year, the regulator obtained monetary relief in its enforcement actions — including in the form of civil monetary penalties, disgorgement, and restitution — totaling $1,321,046,710. The figure is 39% higher than that of the previous fiscal year.

Notable crypto fraud cases

While the CFTC did not specify the exact amount of regulatory penalties obtained from digital currency-related companies, it pointed out several charges involving Bitcoin (BTC) fraud. The CFTC noted the $147 million crypto scheme Control-Finance Ltd, which defrauded more than 1,000 investors to launder at least 22,858 BTC.

The CFTC also mentioned a civil case against Jon Barry Thompson, who was accused of a $7 million BTC-related fraud, and Joseph Kim, who was accused of misappropriating Bitcoin and Litecoin (LTC) from several people and fined $1.1 million. The document continued:

“The Division successfully litigated the cases involving digital assets it had previously charged, obtaining, among other things, rulings affirming the Commission’s authority to prosecute fraud and manipulation involving digital assets that satisfy the statutory definition of a commodity.”

The CFTC filed 69 enforcement actions, which was slightly higher than the five-year average of 67.5.

New CFTC chairman calls for a principled approach toward crypto

Earlier in November, CFTC chairman Heath Tarbert called for “principles-based regulation” for cryptocurrencies. The chairman said that such an approach involves moving away from detailed rules to relying more on high-level and “broadly-stated principles” to define standards for regulated firms and products.

In late October 2019, the commission granted its fintech research unit LabCFTC status as an independent operating office. Following the elevation, the CFTC’s fintech hub started reporting directly to Tarbert. In the announcement, Tarbert noted:

“Blockchain, digital assets, and other developments hold great promise for our economy. Now is the time for LabCFTC to play an even greater role as we work to develop and write the rules for these transformative new products.”

4 Possible Reasons Bitcoin Dropped to $6.5K, According to VanEck Exec

Bitcoin (BTC) price’s decline has come as a result of geopolitical and financial factors, a senior investment executive has suggested. 

In a tweet on Nov. 25, Gabor Gurbacs, digital asset director at investment management giant VanEck, highlighted several causes which, he says, “may” have forced Bitcoin to lows of $6,500.

His findings chime with general sentiment over Bitcoin price, which recovered around 11% on Monday to linger around $7,200 at press time.

China’s publicity war on cryptocurrency

Like many, Gurbacs accepted that China reportedly cracking down on cryptocurrency exchanges offering services to its nationals had piled pressure on Bitcoin. 

Specifically, investors saw the risk and opted to exit the market, hoping to buy back in at lower levels. 

“I think investors are worried about China crackdown news and hence some second guess their re-entry point and lower prices,” he said in another post.

Tax reporting arbitrage

As Cointelegraph reported, an increasingly popular theory around Bitcoin trading activity focuses on tax obligations. 

In the United States, investors may be attempting to drive the market lower in order to record small or even negative gains on their holdings for 2019. 

Described by Gurbacs as “year-end tax-loss arbitrage,” it remains uncertain how much participation would be needed to move the market as much as it did in the past week.

Bitcoin liquidity “evaporating fast”

According to Gurbacs, who cited data from Skew Markets, liquidity on Bitcoin trading platforms is facing a significant squeeze. 

This was also a likely product of concern over China’s policy, he added, something which has traditionally impacted sentiment.

“Bid-offer spreads widest in the past 3 months. Be careful out there. Market can snap fast any direction. Ease into positions. Avoid large/any market orders,” Gurbacs advised.

A further price trigger may have come in the form of product development and mergers and acquisitions, he said, with “many” recent examples funded with cryptocurrency.

Bitcoin Price: Strong Bounce at $6.5K Enough for a Bullish U-Turn?

Bitcoin (BTC) closed the week down at $6,900 having lost around $1,400 or 18.72%. Monday got off to a disastrous start for the bulls, with a selloff in the Asian market session, losing another 5.5% finding lows of $6,500 before the bulls responded with a 13% swing back over $7,300. 

As has been witnessed recently, Bitcoin has continued to dictate the valuation across the cryptocurrency market as a whole. Notably, Ether (ETH) briefly traded around $130, but has since recovered and is now attempting to retake $150, up around 6% for the day.

Bitcoin dominance continues to attempt retaking 70% and looks likely to do so in the near future. 

With volatility returning to the BTC market, we will take a look to see if this is a relief rally or if there are signs that this is more of a pivotal moment for the number one crypto asset.

Cryptocurrency market daily view. Source: Coin360

Weekly chart

BTC USD weekly chart. Source: TradingView

Bitcoin failed to close the week above the 100-week moving average of $7,400, which has typically spelled trouble for the price of Bitcoin. The 100 and 560-week moving averages are due to cross bullish next week and often price does reverse into moving average crosses, so it is not unusual price action being witnessed.

Price has ultimately found support at a previous highly traded volume node on the Volume Profile Visual Range, or VPVR, just below 65% of the retracement from the 2019 highs of 14K. 

The bounce has also come from around the same price point that saw a very strong reaction back in May 2019. 

The Moving Average Convergence Divergence indicator, or MACD, still implies that there is bearish momentum. Selling volume was above average last week and the price is trading below the 100-week moving average. So looking at the higher time frames, one would be forgiven for concluding that the outlook remains reasonably bearish. 

Daily chart

BTC USD daily chart. Source: TradingView

The daily chart is a little more useful in identifying the trend in the price of Bitcoin. It is evident that Bitcoin has bounced off the same $6,500 level as occurred in May. But additionally, Bitcoin has apparently found support on the diagonal channel in which it has been trading for almost 5 months. 

This support appears to be backed up by a bullish divergence on the daily chart. This is identified by the On Balance Volume (OBV) indicator printing a higher low, whereas price has printed a lower low. This is suggesting that the selloff is being powered by diminishing selling and that there is hidden accumulation.

BTC USD daily chart. Source: TradingView

The support found at $6,500 is encouraging for the bulls. But there remains a bearish case that the technical target of the descending triangle is yet to complete. So there is a possibility that Bitcoin will need to do more business in the $6K price region. 

The most bearish immediate outlook at the moment would be $6K failing to act as support and a fast fall to retest the 200-week moving average, currently around $5,400

4-hour chart

 

BTC USD 4-hour chart. Source: TradingView

Looking at the 4-hour bitcoin chart as an immediate guide for how the rest of the week may play out, it’s clear that Bitcoin has run into some resistance at $7,400, in the vicinity of the 100 WMA.

Breaking and closing the week above this level is the main task for the bulls this week.

There is also a clear OBV confirmed divergence on the 4-hour chart, a possible strong sign of a least some attempt by the bulls to continue the price appreciation; this would also be supported by a bullish divergence and cross on the 4-hour MACD.

Market sentiment

BTC USD 4-hour chart. Source: TradingView

A look at sentiment in the market shows that Bitcoin funding is negative in the perpetual swap markets. Sustained periods of negative funding has previously had an inverse relationship with the direction of the price and, thus, supports the bullish case.

The same sentiment extends to the futures market where it is clear that the speculation over the strength of Bitcoin’s futures premium dropped to lows witnessed during previous corrections and bottoms. 

Additionally, the fear and greed index has dropped to new lows with the market being in extreme fear suggesting that some of the weaker market participants are giving up hope — a good sign for the contrarian traders.

Fear & Greed Index. Source: alternative.me

Summary

Overall, the price of Bitcoin has again responded positively following a selloff. There are underlying signs of a case for a bullish reversal going into the year. But for the bullish scenario to proceed, Bitcoin would need to regain the 100-week moving average at around $7.4K in the near future.

Failure to do so will mean that Bitcoin potentially needs to do more testing of the bulls in the $6K range. A lack of response here would potentially lead to a much bigger decline and test of the 200-week moving average.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.