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The Secret Behind What’s Driving Cryptocurrency Prices

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What’s been driving crypto prices? During a period roughly between May 23rd and last weekend, crypto prices were holding a steady course and then suddenly within a brief 24 hour period both bitcoin and Ethereum lost over 12% of their value.  During that same period virtually all of the 100 largest cryptos were also falling at double digit rates.

Weekend trading can sometimes be misleading but this time seemed different. First came the headline from Cointelegraph: “All of Top 100 Cryptocurrencies See Red Amidst CFTC Price Manipulation Probe”.  This was followed by “South Korean Exchange Suffers a Hack, Sending Crypto Markets Tumbling”  written by Hacked.com’s own Gerelyn Terzo.

As these observers so correctly pointed out, over the course of just 24 hours more than $20 billion in crypto value just evaporated.  How was that possible considering that prices were already depressed by over 60%? What was it in those two news headlines that was so damaging to the fortunes of crypto investors?

When you take a close look and the CFTC stuff or the South Korean hack, it is obvious that the headlines aren’t worth the loss of $10 billion in crypto value.  This is not to dispute the accuracy or the quality of these writers. It is just darn difficult to reconcile the impact of either event. Please stick with me while I explain.

The CFTC Is Your Friend

Government regulation over financial markets is a fact of life and if cryptocurrencies are ever going to reach mainstream acceptance, regulators will be involved.  By mainstream, we are talking about assets that can be used for something other than tax evasion or nefarious purposes. As an investor, having the CFTC looking to protect your interest is an absolute benefit.

Even though 100 of the top cryptocurrencies got hammered when the CFTC news came out, trading records related only to bitcoin are involved.  The focus on bitcoin of course stems from the fact that a futures market exists that offers crypto investors the opportunity to hedge their risks.  This is a big plus.

Perhaps the most absurd part of the market’s reaction is how little is new or even surprising. The four exchanges in question, Bitstamp, Coinbase, itBit and Kraken, have been providing data to the CFTC as part of the original futures listing agreement.  For whatever reason, that agreement was not highly specific and thus the various parties are jockeying over legal issues. In the end, the CFTC will prevail because they have to power to do so.  End of story.

Korean Exchange Hack

Over the weekend Bloomberg reported the South Korean crypto exchange Coinrail had uncovered evidence of a hacking attempt.  Obviously, this is never a welcome event but is it enough to significantly affect the overall market by $10 billion? Well, consider this.

Coinrail is a tiny exchange that barely makes the list of top 100 doing only about $2.5-$3.0 million in daily trading in a market worth over $300 billion. Of the three affected coins – NPXS, NPER and ATX – only the later held any real value at $46 million according to CoinGecko.  NPER is worth less than $6 million while NPXS is quoted a zero. Is this the sign of a major Eastern European hacking ring destine to disrupt the crypto investment world or a couple of college kids on summer vacation?

The Secret Behind What Is Driving Crypto Prices

Hats off to Cointelegraph for citing the so-called bitcoin evangelist Alistar Milne survey of his Twitter followers on what caused the weekend price calamity.  Only 9% blamed in on the Coinrail hack. Something like 10% pinned it on the CFTC subpoenas. The overwhelming 81% majority checked the box “Crypto iz ded” or “Aliens”.  We are going to assume that Alistar’s followers are above average in the knowledge of crypto.

Clear Signs Of An Oversold Market

When investors dump securities out of fear or frustration, it is a sign of capitulation.  Back in March a similar sell-off lead to the surge in prices during April. This is the sort of thing that appears to be happening all over again.  Sometimes capitulation occurs during a fundamentally scary period like the financial crisis of 2008. Other times capitulation takes place with less drama when investors simply throw in the towel and sell from fatigue.  My guess is this is what is happening these days. Only the Aliens know with certainty. As for the rest of us, I am a buyer.

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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4.4 stars on average, based on 82 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Basic Attention Token Up 40% Over 7 Days

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Basic Attention Token (BAT) has recorded 16% growth in the past 24 hours, which adds to the total 40% gains made in the last week.

This time last week BAT was trading at a three month low of $0.19. The sudden spike in the last 24 hours combined with steady growth throughout the week has seen it recover to its pre-June crash price of $0.28.

Few coins or tokens in the Top-100 market cap rankings have recovered to their pre-’Sunday Bloody Sunday’ levels, but BAT is one of them.

BAT’s recent surge has seen it break into the Top-50, and the source of its rise shouldn’t be too hard to pinpoint.

Brave Browser Launch

A new web-browser was launched yesterday by the creator of Javascript and the co-founders of Mozilla Firefox.

The Brave browser is fitted to work directly with the Basic Attention Token, and rewards users for viewing targeted advertisements. Viewers of the ads are compensated for their ‘attention’, and are rewarded in BAT tokens.

The recent launch is undoubtedly related to the token’s strong performance over the past week, as curious denizens of the internet rush to see just how much money they can make for doing what they normally do – browsing the web.

As it stands, the end user actually ends up paying to be advertised to. Think about the bandwidth and computing resources required by advertisements. While that number may be small on any given page, it will soon amount to a huge chunk of your resources when accumulated over many web pages over many days.

With BAT, the user gets paid for their time and attention, and thus evens out the playing field as far as advertisers and consumers are concerned.

Fair Play

Co-founder of Firefox, and creator of Javascript, Brendan Eich, emphasized the fairness aspect, with the Brave/BAT combination threatening to upend the existing advertising paradigm. Eich was quoted as saying:

“The user deserves a share because their attention is being used up a little bit by ads. We’re working on better advertising that is truly private.”

Eich continued:

“The BAT is the token for re-monetizing the user’s attention, including the user in a fair play system. (BAT) is what denominates attention in the sense of user engagement in a way that is not likely to be abused and rewards the users.”

As good as all of this sounds, the jury is anything but out on Basic Attention Token. The ICO may have raised $35 million in just 30 seconds, but if the latest reports are anything to go by, the rewards that a person gains from focusing their attention on the ads do not amount to much.

Undoubtedly this will change if the platform gains adoption in higher numbers. Before BAT can push any higher up the rankings, it will need to show businesses why they should bother to advertise using BAT, and it will need to incentivize end-users to engage with the platform to a greater extent.

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 11 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Crypto Real Estate: The Time Is Now

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If you’re a Russian oligarch, an Asian billionaire or just a simple kid from South Jersey with giant aspirations, it is time for action in the newly emerging world of crypto real estate.  Here is why.

For the average home buyer the price of a home has increased about 1.72% annually over the past 10 years.  That is just slightly more than the 1.49% rate for the U.S. economy. Things have changed somewhat in recent time and we read Case Shiller numbers placing the rate between 5%-7%.

For investors in bitcoin, the action is taking place elsewhere in the real estate world.  It is in the world of the super high-end real estate where BTC and other cryptos can play a role.

If your soul contains an ounce of cynicism, at this point,  you are probably saying what is new about the connection between crypto and real estate?  The answer is arbitrage. Never have high-end property prices been so high and crypto prices so low.  It would be a classic arbitrage to sell high-end real estate and buy bitcoin.

Natural Buyers For Bitcoin

There are plenty of statistics on housing and loads of public records revealing who owns a given piece of property.  The US government claims that 9.6 million Americans own second homes and perhaps 16% own investment property.

But when it comes to the true high-end market, global real estate is definitely in the billions. For example, take penthouse in 432 Park Ave in New York that, when new, sold for over $100 million in cash and you get the idea.  This is a market where anonymity is prized and protected. This has long represented the “no brainer” for bitcoin to gain acceptance. And best of all, it is perfectly legal medium of exchange.

Enter Propy (PRO)

Here is a company that appears to be positioned to take advantage of transactions in the global ultra high-end real estate market. Before getting started, one thing needs to be disclosed.  I neither own or am being compensated for writing about Propy. I stumbled across the name purely by accident.

Propy.com fancies itself as being dedicated to solving the complexities of purchasing property across borders.  They claim to be the world’s first international marketplace. The PRO token is built on the Ethereum ERC20 standard. Propy raised $15.4 million with their ICO last September which places a value on the company of roundly $100 million.

So PRO may not rank with the likes of Telegram but they are not exactly chopped liver either. With the spread between the price of ultra high-end real estate and bitcoin never having been greater and the perpetual need for anonymity, the team at PRO may find itself in a sweet spot no matter if the like it or not.

The First Crypto Test In Rome On June 28

CCN.com reports that PRO has managed to team up with the Hilton family-owned real estate broker Hilton & Hyland in an auction of a Roman villa named the Palazetto Mansion aiming to snatch $38 million in dollars or crypto from the buyer.  This is not first effort of its kind but it is by far the largest.

Arbitrage In The Air

Events in Rome on June 28 will be most interesting as much for bitcoin as for PRO.  This is not to say that bitcoin is the only crypto in the world, just the largest and best known. Nevertheless, the total value of bitcoin is now just a little over $114 billion so every billion of future real estate transactions will make a difference at these levels.

Perhaps this is all wishful thinking on the part of someone who owns neither PRO nor BTC but several things are obvious.  First, those folks that put their hidden billions in real estate using corporate identities are not casual investors but savvy players with lots of high priced advisors.  Arbitrage spreads between ultra high end real estate and crypto present a pretty irresistible attraction. Just something to consider when investor psychology toward crypto in general stinks.  

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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4.4 stars on average, based on 82 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Treading the Floods: Cryptocurrency Prices Stable Following Bithumb Attack 

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Cryptocurrencies emerged unscathed Wednesday following yet another security breach of a South Korean exchange, as the market continued to favor a corrective rally for bitcoin and the major altcoins.

Crypto Prices Hold Steady

Bitcoin fell by as much as $200 Wednesday on news of a cyber attack targeting South Korea’s Bithumb exchange. However, the coin quickly recovered and now sits just shy of $6,800, according to data provider CoinMarketCap. Prices peaked at $6,821.56 at 12:34 UTC.

Compared with 24 hours ago, bitcoin’s per-coin value was virtually unchanged.

The ten biggest altcoins by market cap exhibited the same pattern, with prices treading water compared with Tuesday afternoon. The total cryptocurrency market was valued above $290 billion, up from an earlier low of around $282 billion.

Bitcoin and the major altcoins have more or less retained their bullish bias, which suggests that a continuation of the upward trend is likely. Since bottoming last week, coins have rebounded $26 billion.

Bithumb Attack: What We Know

Hackers made off with roughly $31 million in stolen cryptocurrency on Wednesday as Bithumb suffered its third cyber breach in 12 months. The attackers reportedly targeted users’ holdings of XRP, the third-largest cryptocurrency by market cap, by running a series of unauthorized access attempts.

Bithumb was unable to prevent the attack despite spending upwards of 10 billion won ($9 million) on security enhancements. This includes complying with new guidelines for financial institutions requiring 5% of company staff be made up of IT specialists. Bithumb has reportedly exceeded that quota by a wide margin.

The Seoul-based exchange confirmed that it had migrated outstanding crypto balances to cold storage and said it will fully refund affected users. Transactions on the exchange remain suspended for now.

Although news of the attack hit the airwaves on Wednesday, some analysts believe the theft occurred several days earlier as part of Bithumb’s data upgrade. However, the exact cause of the breach remains unclear.

Goldman Sachs Weighs Crypto Trading as an Option

U.S. multinational investment bank Goldman Sachs is considering taking a bigger dive into cryptocurrency by launching a full-scale trading operation, according to COO David Solomon.

“We are clearing some futures around bitcoin, talking about doing some other activities there, but it’s going very cautiously,” Solomon said during an interview in China, as reported by CCN. “We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Currently, the Wall Street investment giant is clearing bitcoin futures contracts. It has also announced plans to introduce a new bitcoin trading operation, which includes using its own money to trade with clients in a variety of contracts linked to bitcoin.

Institutional traders are awaiting the arrival of custodial services dedicated to cryptocurrency before taking the full plunge into digital assets. To that effect, the San Francisco-based  Coinbase exchange is leading the charge by announcing a new line of crypto custodial services to unlock up to $10 billion in institutional capital.

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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4.6 stars on average, based on 461 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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