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Cryptocurrency Prices Slide as Regulatory Fears Rise

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The bitcoin price has dropped below the psychologically important $9,000 level amid a raid by authorities on No. 1 South Korean bitcoin exchange Upbit. Bitcoin’s sell-off was exacerbated by reports that the trustee of Japan’s shuttered bitcoin exchange Mt. Gox was unloading more BTC.

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Investors fled Upbit and dragged the bitcoin price down with it to multi-week lows while the other leading cryptocurrencies fell in sympathy. The market cap of the broad cryptocurrency market fell to about $380 billion, shaving nearly $100 billion from last week’s total value, as Bloomberg reported. and revisiting March levels.

Source: CoinMarketCap

Upbit has reportedly been the target of an investigation since March on suspicions that customer funds were transferred from the exchange’s account to one owned by a Upbit official. The police and nearly a dozen investigators reportedly raided the offices of Upbit, the No. 3 cryptocurrency exchange globally based on volume in the past 24-hour period, on Thursday and Friday, combing through the offices in search of a smoking gun tied to allegations of defrauding investors, according to reports citing someone in the Seoul Southern District public prosecutors’ office.

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“Upbit is currently under investigation by prosecutors and is cooperating,” said Upbit officials in a statement to customers cited in Bloomberg.

Meanwhile, the exchange noted that customer accounts were deemed “safe”, while transactions including deposits and withdrawals were officially unaffected. But with the nightmares of Mt. Gox and more recently Coincheck not too far in the rearview mirror, investors weren’t taking any chances.

Knee-Jerk Regulation

Cryptocurrency market participants have been trying to avoid any over-regulation in the market by engaging with policymakers, and regulators similarly have said they want to avoid rushing into adding laws that would ultimately stifle innovation. But incidents like this, where there are suspicions of fraud at one of the world’s leading bitcoin exchanges, doesn’t help the regulatory cause.

Making matters worse was the anticipated upcoming sale of thousands of bitcoin and bitcoin cash by the trustee of the now-defunct Mt. Gox exchange. Records indicate that some 8,000 BTC and 8,000 BCH were transferred from the exchange’s trust to cold storage in preparation of a sale.

Prior to the latest setbacks, the cryptocurrency markets were on the comeback trail after a volatile first quarter. South Korean regulators have been cracking down on bitcoin exchanges of late, but there are also murmurings that officials could lift the ban that’s currently in place on initial coin offerings (ICOs), which would be a boon for the market.

Bitcoin and the other leading digital currencies have weathered these types of storms in the past, and if anything it serves as a stark reminder to investors not to keep their funds on any trading platform and instead to transfer them to a hard wallet.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 6 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. Full disclosure, she's invested in bitcoin.




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Altcoins

As Gemini Embraces Zcash, Japan’s Coincheck Delists Privacy Coins

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Japanese crypto exchange Coincheck has announced it will remove privacy coins from its trading platform in the wake of a “drastic review” of its internal controls. The decision paints privacy coins like Zcash in a negative light vis-a-vis consumer protection and stability.

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Coincheck to De-List Privacy Coins

Beginning next month, trading of Zcash (ZEC), Monero (XMR) and Dash (DASH) will no longer be possible for Coincheck users, according to a recent statement issued by the firm. The so-called privacy coins are being removed as part of a “new management strategy that thoroughly protects customers.”

Traders have until June 18 to withdraw their coins or risk having them converted to yen at market price. According to CCN, Augur coin (REP) will also be de-listed due to its association with online gambling.

Rumors have circulated for months about Coincheck’s plans to de-list anonymous cryptocurrencies in the wake of a high-profile cyber heist in January. The attack, which targeted $530 million worth of NEM tokens, resulted in a sweeping review of domestic cryptocurrency exchanges by Japanese regulators.

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Coincheck may not be the last Japanese exchange to de-list anonymous coins. Japan’s Financial Services Agency (FSA) is said to be encouraging other domestic exchanges to do the same.

The Coincheck platform has since been acquired by Monex Group, one of Japan’s largest online exchanges. The purchase allows Monex to rehabilitate the troubled exchange following a disastrous PR campaign.

Privacy Coins: An Opportunity and a Challenge

Though privacy coins had nothing to do with the Coincheck heist, regulators have made a causal link between anonymity and criminality when it comes to cryptocurrency. Pressure from regulators could force more exchanges to de-list privacy coins to avoid further complication down the road.

Debate over privacy coins extends far beyond the currency and into the realm of politics and philosophy. Banks and governments have a vested interest in keeping anonymous currencies in check. On the opposite side of the spectrum, privacy advocates like Edward Snowden argue that anonymous coins are the future of trade regardless of whether criminals take advantage of them.

Research carried out by the University of Michigan-Dearborn’s Jeffrey Quesnelle concluded that Zcash had no major vulnerabilities when it comes to privacy. This has been confirmed by other privacy specialists who say ZEC is the most anonymous privacy coin of all. That’s because it employs zero-knowledge proofs as well as enhanced encryption techniques that completely obscure the sender’s address. This is in contrast to other privacy-focused protocols, which generate fake addresses to hide the sender’s identity.

The U.S.-based Gemini exchange recently announced it had gained regulatory approval to begin listing Zcash. Deposits in ZEC were enabled on Saturday with full trading support expected to be launched on Tuesday.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 406 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Cryptocurrencies Rebound 8% from Recent Low as Tom Lee Gives Post-Consensus Takeaways

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Cryptocurrenc prices have begun the week on a positive note, as bullish sentiment returned to the market following an underwhelming reaction to the Consensus blockchain summit.

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Crypto Prices Rally

Bitcoin and the broader altcoin universe booked solid gains Monday. The combined value of all cryptocurrencies peaked at $392 billion, according to CoinMarketCap. At time time of writing, the total market cap was worth $389.6 billion.

Prices bottomed near $361 billion on Thursday, their lowest level of the month, in the wake of a high-profile blockchain event.

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The ten largest cryptocurrencies by market cap rose by at least 3% on Monday. Tron was the biggest gainer percentage-wise, adding 12.7% to $0.077. Bitcoin cash (BCH) jumped 8.1% to $1,275 following a double-digit selloff last week. Cardano and Stellar each rose more than 4%.

Bitcoin rose 3.1% to $8,493. Its share of the overall market slipped to 37.2% from a high of around 37.6% last week.

Trade volumes have been relatively thin over the past 24 hours, with turnover amounting to $16.8 billion. Crypto trade volumes averaged around $21 billion at the end of last week. During the height of the bull rally earlier this month, daily turnover exceeded $30 billion.

Tom Lee Remains Bullish on Bitcoin

The head of research at Fundstrat Global Advisors admitted recently that his Consensus price forecast missed the mark.

In an interview with CNBC that appeared Friday, Lee said his firm was “overly optimistic” about the potential for a bigger Consensus price rally but nevertheless reaffirmed his bullish outlook on bitcoin.

“While there was not a Consensus bump, our conviction on crypto-currencies strengthened during the conference,” he said. “It’s the people that you know are important to this industry coming together.”

Prior to the event, Lee had predicted significant gains for bitcoin and other crypto assets. His reasoning was rooted in the last three Consensus summits, which sparked an immediate rally for digital currency prices.

Bitcoin prices declined sharply during the blockchain conference and eventually bottomed below $8,000 – a figure not seen in a month.

In Lee’s view, the Consensus rally did not happen for three underlying reasons: regulatory uncertainty, acceptance hurdles within banks and a lack of institutional custodial tools for mass adoption.

He added:

“Bitcoin doesn’t have to go up every day to move from $8,000 to $25,000. The ten best days account for all the return of bitcoin in a year. If you didn’t own bitcoin for ten days each year, you lost 25 percent each year.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 406 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Cryptocurrency Prices Approach One-Month Lows as Altcoins Plunge, Bitcoin Falls Below $8,000

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Crypto prices were down sharply at the start of Friday trading, with the total market capitalization falling $22 billion over the past 24 hours.

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Market Update

At the time of writing, cryptocurrencies were collectively valued at $361.6 billion, according to the latest data from CoinMarketCap. The asset class peaked above $391 billion roughly 20 hours ago.

Trading volumes slipped to roughly $18.8 billion, with Hong Kong and South Korean exchanges accounting for the largest share of total activity.

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Like previous declines, the bulk of the losses were concentrated in the altcoin class, allowing bitcoin to boost its market share to nearly 38%.

Bitcoin prices breached the $8,000 floor early Friday, with prices shedding 4.8% to $7,974.

In terms of percentage losses, IOTA was the worst performing cryptocurrency in the top-ten. The coin shed 13% to $1.67.

Bitcoin cash continued its post-fork decline, with prices shedding 9.1% to $1,183. BCH is currently trading near its lowest level in a month.

Ethereum prices declined 6.6% to $664. Ripple’s native XRP currency was down more than 7% at $0.658.

Cryptocurrencies are on track for their second consecutive weekly decline, with prices shedding nearly 14% from last Friday.

New Study Quantifies Bitcoin Mining Energy Consumption

The first peer-reviewed study examining bitcoin’s energy consumption was released Wednesday, and the results aren’t endearing.

Research that appeared in a monthly publication by Cell Press estimates that bitcoin mining consumes at least 2.6GW of power, which is equivalent to the entire electric power grid harnessed by the Republic of Ireland. The report, titled Bitcoin’s Growign Energy Problem, predicts that power consumption from mining could reach 7.7GW before the end of 2018. That’s roughly the same amount as electric that Austria currently requires.

Author Alex de Vries made it clear in his report that the numbers he is using are speculative given the decentralized and secretive nature of the mining industry. The paper shows that current energy consumption could be as low as 2.6GW if we factor in the latest and most efficient mining hardware from Bitmain.

The so-called energy problem associated with bitcoin is expected to become more cumbersome as the network’s size increases. Some have speculated that mining could account for 5% of global energy consumption in the future.

Globetrotting crypto miners are constantly on the look out for the best energy deals, especially in the wake of China’s ban on the practice. Interestingly, several countries have stepped forward to highlight their favorable energy policies toward miners.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 406 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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