Venezuela, the most hardline socialist country in the American continent, is in a steep crisis in recent years ever since oil prices fell below the $100 area in 2014 down to a third of the price in early 2016. The people are turning to Bitcoin as spiraling inflation destroys the economy.
Bitcoin Adoption Hits Record Highs In Venezuela As Inflation Looms
The Bolivarian Republic of Venezuela is home to one of the worst hyperinflation crisis in the world ever. President Nicolas Maduro blames external factors and U.S. sabotage for the chaos Venezuelans live in. Inflation has skyrocketed to 8900% in March 2018, according to tradingeconomics.com. As the value of the Venezuelan Bolívar plunges in the streets of Caracas, which lowers the purchasing power of the official minimum wage, the government keeps issuing more currency as it raises the nominal minimum wage.
Bitcoin is buoying an increasing number of Venezuelans that want out of the spiraling madness. Erik Voorhees, founder and CEO of cryptocurrency exchange ShapeShift.io, commented recent data provided by Coin.dance, which pointed to an exponential adoption of Bitcoin, switching from VEF (Venezuelan Bolívar Fuerte).
“Volume of person-to-person Bitcoin trading in #Venezuela hits record high last week… sadly as much a measure of BTC adoption as it is of #bolivar debasement”, wrote Erik Voorhees.
Shortly after the tweet, a Venezuelan Twitter follower explained the importance of cryptocurrency in the midst of such never-ending crisis.
“Thanks to crypto and trading I can live here in Venezuela without suffering what the most of people suffer everyday. But is heart breaking see people eating direct from garbage can (entire families) and see so much poverty”, he said.
“You say sadly, but isn’t this exactly what Bitcoin’s promise is? To provide sound money, that works, to those who no longer have it? You ought not be sad each time the next state money fails; as more and more currencies fail sound money finds its chance to prevail”, said another Twitter follower, before granting that it is sad that people are suffering.
The weekly LocalBitcoins volume for the week of 14 April 2018 was of 2,789,991,957,138 Venezuelan Bolívares. The previous week held a figure below two trillion VEF, at 1,744,669,576,098 Venezuelan Bolívares. Volumes were mostly below 1 trillion VEF before that.
As Erik Voorhees mentioned, most of this volume in Venezuelan Bolívares is a result of the hyperinflation taking over the country. Weekly trading volumes in Bitcoin show a different picture. The last two weeks saw 663 and 652 bitcoins exchanging hands. The all-time high was 805 Bitcoins in the week of 08 April 2017, a year ago. Bitcoin trading steadily decreased to as low as 157 coins in the week of 06 January 2018 before the newfound adoption.
The self-branded “Venture Capital Working Group” has approached the SEC to propose regulatory “Safe Harbors” for some tokens and cryptocurrency.
Crypto Advocates Bring Proposal to SEC
A group of lawyers and investors assembled by venture capital firm Andreessen Horowitz met with the SEC in Washington on March 28 to lobby against defining all cryptocurrencies as securities which would subject them to a higher degree of oversight.
The “Venture Capital Working Group” which includes Andreessen Horowitz and Union Square Ventures, the two largest capital venture investment firms in the digital currency space, have proposed a “Safe Harbor” for some virtual currencies to be designated as “utility tokens” instead of securities as regulators have indicated they may be.
The argument falls to whether a token is issued through an ICO and acts solely as an investment of value or if it has utility as a payment method, decentralized from its issuer. As reported in the New York Times article.
Two currencies used as examples are Bitcoin and Ethereum. Bitcoin was not launched through an ICO and is created daily as miners solve blocks to release new coins which helps maintain the network. Thus Bitcoin is generally considered safe from being regulated as a security.
Ethereum, on the other hand, was launched through a presale, now called an ICO, which the SEC sees as the key to defining a security.
Richard Levin, a lawyer at the firm Polsinelli which works in the cryptocurrency space was quoted by the Times saying,
“It’s a ‘come to the lord’ moment. We are seeing a watershed moment in which many firms in the digital asset community who may have been ignorant of the law — or poorly informed — are now coming to terms with the fact that they are subject to regulators.”
The Question of What is a Security Lingers on
In the past year, $6 billion has been raised by ICO’s creating thousands of cryptocurrencies. The resulting tokens are generally meant to be used as internal payment methods in the software being built. Entrepreneurs in the space argue that is proof of utility and so their coins cannot be considered securities.
Chairman of the SEC Jay Clayton disagrees and believes that almost every token resulting from an ICO should be regulated as a security. In recent months the SEC has subpoenaed dozens of people and companies in order to determine how ICO’s are presented to potential investors.
Securities by law must be registered with regulators and can only be sold on registered exchanges like stocks and commodities. At the moment no registered exchanges offer cryptocurrencies.
As the SEC remains unclear on their policies for regulating the space some entrepreneurs are seeking ways to register their tokens as securities while some cryptocurrency exchanges are seeking ways to become registered as security exchanges.
Ripple price extended gains and moved above the $0.8500 level before correcting lower against the US dollar.
There is a key bullish trend line forming with support at $0.7900 on the hourly chart of the XRP/USD pair (data source from Kraken).
The pair is currently correcting lower and it will most likely find support near the $0.7900-0.8000 zone.
Ripple price surged higher against the US Dollar and Bitcoin. XRP/USD is now placed well in a bullish zone above the $0.7500 level.
Ripple Price Trend
There was a strong upside move noted in Ripple price from the $0.7000 swing low against the US Dollar. The price moved sharply higher and cleared many sell zones on the way up such as $0.7500 and $0.8000. It even moved above the $0.8500 level and traded to a new monthly high at $0.8629. Later, the price faced a tiny resistance around $0.8600, which resulted in the start of a downside correction.
It is currently trading near the 23.6% Fib retracement level of the last upside wave from the $0.7010 low to $0.8629 high. However, there are many supports on the downside near the $0.8000 level. There is also a key bullish trend line forming with support at $0.7900 on the hourly chart of the XRP/USD pair. Moreover, the 38.2% Fib retracement level of the last upside wave from the $0.7010 low to $0.8629 high is close to the trend line support. Therefore, the $0.7900-0.8000 zone is likely to act as a major buy area in the near term.
Looking at the chart, the price remains in a decent bullish trend above $0.7500. If there is an extended correction from the current level, then there could be a strong buying interest around $0.7900. On the upside, a break above $0.8600 could push the price towards $0.9000.
Looking at the technical indicators:
Hourly MACD – The MACD for XRP/USD is gaining momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is moving lower from the 80 level.
Tezos is embroiled in controversy once again as co-founder Arthur Breitman is slapped with a fine and a trading ban for two years by The Financial Industry Regulatory Authority (FINRA).
Breitman Fined $20,000
The Wall Street regulatory body has come to a settlement with Breitman after he was accused of making false statements about his side venture (Tezos) while he was actively employed at Morgan Stanley. All registered FINRA securities professionals are required to report any for-profit activity outside of their stated employment if there is “reasonable expectation of compensation.”
The regulatory action stems from a Reuters article published in October that found Breitman, who is registered with FINRA as a French citizen, never disclosed the work he was doing for Tezos while still employed at Morgan Stanley between 2014-2015.
Among the evidence that Reuters published in its article is a business plan written in 2015 that lists Brietmen as chief executive and makes projections on the potential for the company to be worth as much as 20 billion dollars over 15 years. They also cited two papers Breitman penned under the pseudonym L.M. Goodman about Tezos, showing that he purposely sought to conceal his connection with the company.
FINRA concluded in its settlement agreement that “Breitman did not notify Morgan Stanley at any time that he was engaging in these outside business activities,”
The settlement conditions dated April 18 are that Breitman avoid any dealing with broker-dealers for two years and pay a $20,000 fine.
Breitman neither admits nor denies the charges. His lawyer Sarah Lightdale released a statement saying
“The settlement with FINRA is unrelated to and has no impact on the launch of the Tezos network. Arthur cooperated fully with FINRA at all times and Arthur is pleased to put this personal matter behind him.”
A Series of Conflicts
The Tezos foundation raised $232 million from their initial coin offering last July in order to build their blockchain network for smart contracts but still haven’t delivered any of the cryptocurrency to contributors due to infighting and legal problems in and outside of the boardroom.
The project’s release was originally delayed by problems between founders, Kathleen and Arthur Breitman and Johann Gevers. Gevers finally stepped down from his position as President of the Tezos Foundation under accusations from the Breitmans that he had attempted to embezzle funds and was acting as a hurdle to the progress of their mission.
Other delays came in the form of class action lawsuits brought against Tezos from contributors alleging securities fraud and rumors that the SEC has an ongoing investigation into the foundation.
The latest word from Tezos on Reddit is that they will finally launch their token by late spring.
ETH price surged higher and broke a major resistance at $535-540 against the US Dollar.
There is a major bullish trend line forming with support at $560 on the hourly chart of ETH/USD (data feed via Kraken).
The pair traded above the $588 level and it seems like it may continue to move higher.
Ethereum price accelerated gains against the US Dollar and Bitcoin. ETH/USD traded above the $580 level and it could even break surpass the $600 level.
Ethereum Price Support
The past few sessions were very positive as ETH price broke the $535 and $540 resistance levels against the US Dollar. The price extended gains above the $560 level and traded towards the $600 level. A high was formed recently at $589.08 before the price started a downside correction. It is currently trading near the 23.6% Fib retracement level of the last wave from the $506 low to $589 high.
However, there are many supports on the downside above the $560 level. There is also a major bullish trend line forming with support at $560 on the hourly chart of ETH/USD. The same trend line support is close to the 38.2% Fib retracement level of the last wave from the $506 low to $589 high. Therefore, if the price corrects lower from the current levels, the $560 level will most likely prevent declines. Below $560, the next major support is at $547, which is the 50% Fib level of the same wave.
Looking at the chart, the price is placed nicely in a bullish trend above $560. It may resume its uptrend soon and it could even break the recent high at $589. A successful break above the $589-590 resistance might open the doors for a push towards or above the $600 level.
Hourly MACD – The MACD is slightly reducing its bullish slope.
Hourly RSI – The RSI is currently correcting lower from the 80 level towards 60.
Crypto markets are performing well once again and have broken through the previous high from the last rally indicating a return to bullish sentiment. Total market cap has exceeded the $350 billion level and buying pressure has been strong this morning in Asia. Bitcoin has led the charge trading upwards of $8,350 which marks a 2% gain on the day. Altcoins have all been lifted by this momentum and are mostly in the green at the time of writing. One leading the way in the top 25 at the moment is Ripple.
Coinmarketcap is reporting a 15% gain for XRP which puts it ahead of all other cryptocurrencies during the Asian trading session. Ripple’s digital coin is currently trading at $0.84 which is a steady gain from the $0.72 level it was at this time yesterday. Over the week Ripple has climbed 38% from $0.61 this time last Friday. The monthly picture also shows a gain of around 25% as crypto markets start to recover from three months of selling pressure. Against BTC Ripple is up 14% at 10160 satoshis from 8900 sats this time yesterday. The weekly chart indicates an almost 30% gain from 7870 satoshis the same time last week.
Ripple has made more partnerships and agreements than all of the other cryptocurrencies combined yet this has not been reflected in price action over the past few months. It is becoming the company of choice for cross border payments and facilitating financial transfers. The company’s xCurrent platform is now used by over a hundred financial institutions. It doesnt seem like any specific announcements have driven the current bullish breakout as XRP heads back towards the dollar.
The majority of trade this morning has occurred in South Korea on Bithumb and Upbit which have 40% between them in KRW. Japanese Bitbank is the third exchange heavily trading XRP at the moment. Total volume has increased almost 80% from $746 million to over $1.3 billion in the past 24 hours. Ripple’s coin is a solid third in the market cap charts with $33 billion.
Total market capitalization has jumped over 5% in the past day and is currently at $365 billion. This is higher than the previous high from the last rally which is a very good sign for market recovery. Other altcoins showing double digit gains in Asia this morning are Bitcoin Cash, Verge and Nano.
Bitcoin cash price soared higher and broke the $960 resistance level against the US Dollar.
There is a new connecting bullish trend line forming with support at $960 on the hourly chart of the BCH/USD pair (data feed from Kraken).
The pair is likely to extend gains above the $1,000 and $1,020 levels in the near term.
Bitcoin cash price is surging higher above $980 against the US Dollar. BCH/USD will most likely clear sell offers near $1,000 for more gains.
Bitcoin Cash Price Upside Move
There was a nasty upside move in bitcoin cash price from the $900 swing low against the US Dollar. The price surged higher and broke many barriers on the way up such as $920 and $960. It traded close to the $1,000 level and formed a high near $996. It is clearly in a major uptrend above the $900 swing low and it may continue to move higher in the near term.
Should there be a downside correction from the current levels, the $970 level could act as a support. Moreover, there is a new connecting bullish trend line forming with support at $960 on the hourly chart of the BCH/USD pair. Below the trend line support, the 23.6% Fib retracement level of the last upside wave from the $819 low to $996 high is at $954. Therefore, it seems like the $950-960 support zone is very important for buyers. Below $950, the next support is near the 50% Fib retracement level of the last upside wave from the $819 low to $996 high at $900.
Looking at the chart, there is a clear uptrend in place above the $950 level. BCH will most likely continue to move higher and it could even break the $1,000 and $1,020 resistance levels.
Looking at the technical indicators:
Hourly MACD – The MACD for BCH/USD is moving nicely in a bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BCH/USD is currently around the overbought levels.
The key price point for Bitcoin mining profitability is $8,600, according to Morgan Stanley Equity Analyst Charlie Chan and his team. As per their simulation, if the coin can’t recover $8,600 soon, many Bitcoin miners will likely find it unprofitable to keep creating the cryptocurrency.
Bitcoin Mining Profitability
As of today, Bitcoin is trading at almost $8,250 according to Coinmarketcap. The coin is less than half the value it was in late-December, but has improved from early-February numbers, when it hit 2018 lows trading just below $6,000.
“We estimate the break-even point for big mining pools should be US$8,600, even if we assume a very low electricity cost (US$0.03 kW/h),” Chan said.
Because of the uncertainty expressed in Morgan Stanley’s report, TSMC, the Taiwan Semiconductor Manufacturing Company, lowered its 2018 revenue guidance to 10% growth from 10-15%. The firm estimates that about 10% of the Asian chipmaker’s revenue now depends on cryptocurrency mining demand.
Large groups of miners, primarily in China (think Bitmain), work together in mining pools to improve efficiency. But as more miners participate, the difficulty of the process increases.
“We think the injection of new mining capacity will further increase the mining difficulty in 2H18,” the Morgan Stanley analysts said. “Even if the Bitcoin price stays the same in 2H18, we believe mining profits would drop rapidly, according to our simulation.”
Companies that sell specialized ASIC (application-specific integrated circuits) mining chips, on the other hand, appear to have more leeway. The Morgan Stanley model estimates companies that develop ASICs — which are manufactured for the sole purpose of mining cryptocurrency — will break even in two years time if Bitcoin stays above $5,000.
Moving forward, Bill Tai, the chairman of Hut 8 Mining Corp., the North American arm of cryptocurrency mining rig manufacturer Bitfury, expects only 5-10% of the largest miners to survive and be profitable, according to Bloomberg.
“It’s totally different this year than last year. The Bitcoin mining industry was this mysterious dark cottage industry, and it’s about to grow up and about to have elements of institutional scalability at all levels,” Tai said.
The concentration of mining power in the hands of a small number of corporate entities is frowned upon by the large majority of people in the cryptosphere, as it contradicts the very nature of a decentralized network.
A so-called 51% attack, which hit the cryptocurrency Verge earlier this year, would permit a powerful mining pool to effectively steal coins from other users. With the increasing presence of mining pools and ASIC developers, this remains a distant worst case scenario for Bitcoin, although perhaps not as distant as in the past.
We need to see some fundamentals to jolt altcoin price action today. Should there be further gains say in Bitcoin and EOS, they are lagging behind, prices could explode. As statistics shows, Stellar Lumens is spearheading this week’s gain with an impressive 66 percent gain while IOTA is following closely at 43 percent. Even though I still maintain my bullish skew, buying Litecoin, EOS and NEO might present superior returns in the short to medium term.
Everything digital is bound to have their own weaknesses. When it comes to cryptocurrencies, some savvy black hat hackers are having a field day. According to a report from Stellar Protocol Foundation, some $618 Million is missing in 2018 alone. The large chunk of it comes from CoinCheck heist.
As expected, this is but a huge deterrence to adoption as many payment systems are shying away and barring customers from making payment in crypto. To counter this, the Stellar Protocol foundation tasked with mapping out Stellar Addresses shall introduce HTTPS connection between their servers and wallets for security purposes.
It’s our duty to turn on HTTPS by default, or force those who don’t want to, all too easy to inject malware into legitimate users streams. Stellar work by @citizenlab team. https://t.co/dR5g8AdHKT
Price wise Stellar is towing in as per our previous Stellar Lumens technical analysis. What draws my attention is that upper BB bull candlestick banding and a nice follow through of last week’s bullish pressure. Because of this, we should brace ourselves for higher highs as Lumens add up to their gains. After $0.40, buyers should eye $0.50 and the 38.2 percent Fibonacci retracement line at $0.70 in the coming weeks.
After Amazon, everything else is now possible. We might as well hear Facebook and Google getting into the blockchain data market place and relaying Bitcoin user transactions to law enforcement. It’s weird because it waters down everything decentralization efforts.
Such moves makes me think IOTA is doing the right thing and holding is a just about the right thing to do. Anyways, so you know the next IOTA wallet snapshot will take place on May 6, 2018. Then the issue of obsoluteTag field and fixes on IRI will be dealt with.
It will sound like a song but there is nothing else I could say. If you look for IOTA buying opportunities in lower time frames and buy in line with our previous IOTA technical analysis, I really think you stand to turn in a profit.
After all, IOTA is up 8 percent in the last 24 hours and 43 percent in the last 7 days. Besides it’s up 15 cents from last week’s highs and that’s why I recommend buys.
Remember, EOS is still crowd funding, don’t forget that. Already it has more than $2B yet the project is not even live. EOS developers are working hard behind the scenes and with Dawn 3.0 and proper decentralization which the platform promises, will it wreck havoc on Ethereum? Well, that’s a maybe or not.
I won’t rely on current EOS vs. Ethereum metrics because the former has a working product while the later is gearing for a mainnet launch. Price pumps are inevitable so let’s wait and see. Then again, EOS is still an Ethereum token.
I will reiterate what I said yesterday. EOS is still trending within a mid-range accumulation and logically, I shall trade with the trend. Already, EOS is up 5 percent and what I need is a break past $9.5 or even $10-the 50% Fibonacci retracement line before I jump in and buy.
In that case stops should be below $8 with targets at $16. Regardless of short term price swings, expect a pump as we approach June mainnet launch.
Apart from that 20 percent jump, there is nothing much from the fundamental front we can talk about Litecoin in the last 24 hours or so. Anyways, price action is in line with our Litecoin forecast.
Encouragingly, following yesterday’s price expansion, a bullish break out is visible in the 4HR chart while candlesticks are now banding along the upper BB in the daily chart. All these hints of possible higher highs in the coming weeks and that is why buying on dips in lower time frames can be a good trading plan.
Ok, the Restart Energy team plans on meeting Da Hong Fei and undoubtedly their plans of deregulating worldwide energy markets is grand. However, when possible investors begin talking of Restart Energy plagiarizing their whitepaper from a competitor, Grid+, then those are a lot of red flags.
While this is happening, Moonlight is working towards reducing resource compartmentalization. They shall make this possible through easing recruitment and availing superior analytical project management system.
Technically, NEO is at cross roads and you can check out April 19 doji candlestick if you need some evidence. Even if prices are above $70, conservative trades can stay on the sidelines until there’s further price appreciation.
After all, those who got in early can target $90 on the lower limit and $110 on the upside as per our previous NEO technical analysis.
Seeking exemptions from federal oversight that they believe will slow growth of the cryptocurrency space, industry groups are forming in attempts to lobby agencies like the Securities and Exchange Commission (SEC) for limited interference. The groups are worried that policies in Washington could slow the innovation of blockchain-based technologies that underpin cryptocurrencies, as well as the coins themselves, according to people familiar with the matter.
Fighting Back Against Over-Regulation
As we know, regulation in the U.S. is murky at present and there’s a lot of overlap. The SEC claims that digital coins issued by startups are investments, and therefore should be regulated as securities, subjecting the firms to extensive federal oversight. The industry also faces opposition from the Commodity Futures Trading Commission (CTFC) and traditional banking regulators who attempt to police payment systems and enforce anti-money-laundering laws.
In attempts to fight what they see as potential over-regulation, the industry has hired top political and legal talent to lobby for voluntary standards and sing the praises of blockchain.
“You can’t just put your head in the sand and wish away government oversight,” said Jason Weinstein, a partner who works on cryptocurrency-related issues at the law firm Steptoe & Johnson LLP.
Of note here is that Weinstein is a former senior Justice Department official, who now serves on the advisory boards of industry advocates Coin Center and the Chamber of Digital Commerce. The groups have filled their boards with other former government regulators, too, including former CFTC Chairman Jim Newsome, former SEC member Paul Atkins, and former CFTC Commissioner Mark Wetjen.
Meetings With the SEC
The meetings on March 28th with the SEC were attended by Andreessen partner Scott Kupor and general counsel Ryan Ward, Union Square’s Brad Burnham and John Buttrick, and lawyers from Cooley LLP, Perkins Coie LLP, and McDermott Will & Emery LLP, as well as a lobbyist from the National Venture Capital Association.
According to people familiar with the matter, the group was looking for assurance from regulators that their products would be exempt from SEC oversight. They argued that tokens aren’t investments, but instead products that can be used to access services or networks provided by startup companies, people familiar with the meeting said.
If the SEC were to change their perspective, it would allow startups to sell tokens broadly to investors without having to provide regulated disclosures like financial statements and detailed descriptions of their businesses. The group said it wouldn’t object to the SEC intervening if a token issuer committed fraud, the people said.
Unfortunately, SEC officials have privately expressed skepticism about granting such a broad exemption, the people said. What’s more likely is that the agency will offer a limited exemption from oversight if a company’s token sale is capped at a per-investor limit and can’t be resold at a profit to third parties, the report stated.