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Arthur Hayes on Financial Privacy and the Possibility of BTC Hard Fork

BitMEx’s Arthur Hayes explained to Cointelegraph the importance of financial privacy in detail and predicted that Bitcoin should hard fork in order to be fully anonymous.

At the Tangle in Taipei on July 3, American economist and crypto sceptic Nouriel Roubini (aka “Dr. Doom”) and BitMEX CEO and co-founder Arthur Hayes didn’t agree on anything except that “Facebook’s Libra is not cryptocurrency.” One of the reasons on that is, while Roubini took for granted that the success of Bitcoin should be measured by its transaction speed only, Hayes argued that there was a different measurement. Roubini continued to criticize Bitcoin based on his assumption and said, as he has often pointed out, “this conference is not even accepting Bitcoin.” But for Hayes, that is not the only use case. 

For Hayes, the success of Bitcoin hinges on whether or not it can protect financial privacy, especially when cash — the most anonymous means of payment — disappears from society. So, it is no wonder why the two could not reach any agreement on Bitcoin. It may be worth noting that Andrew Neil, a veteran journalist who hosted the debate, also seemed to underestimate the importance of Hayes’ point, as he called the market for financial privacy a niche. 

A day before the Tangle at the Asia Blockchain Summit 2019, Hayes explained to Cointelegraph the importance of financial privacy in detail and predicted that anonymous features would be added to Bitcoin through a hard fork. 

Financial privacy and cryptocurrency

Hisashi Oki: Why is financial privacy important? 

Arthur Hayes: Society obviously values privacy. That is why some people like to use cash. They don’t want governments, families or someone else to know what they are buying. If you are merchants, you may want to offer services that might not be allowed, you want a way to transact values that are not censored. Especially, politically exposed groups want to fund themselves. 

In China, WeChat Pay or any other systems are being rolled out . If everyone is in the same network, all financial transactions are completely transparent, and people can remove you from that financial system for any arbitrary reason that they decide on. 

That is why I think financial privacy from a societal point of view is very important, and as people start becoming concerned about data leakages, different financial institutions being hacked, losing customer data or being negligent about the way they secure digital properties, people now understand that data is important, the security of data is important — it is something about their lives to keep to themselves. 

HO: How do people realize the importance of financial privacy? Is it going to be a gradual process or a sudden wake-up call? 

AH: I think it is going to be a sort of wake-up call. It will be some sort of event like companies losing a bunch of data. Maybe people will wake up and realize one day that “Oh, shit. I wanted to watch some porno” and the government said, “Okay, we are no longer allowing payments to pornography websites.” They used to be able to pay cash, or whatever the method was, but all of their payments were now done with this app, so they were just going to cut off the people they wanted to deal with. 

You will start seeing things people like to do in their privacy or their home, those freedoms curtailed by the wishes of bureaucrats. At that point, they are going to start searching for how they can protect their privacy. 

HO: “Financial privacy” sounds like Western philosophy to me. I am not sure if people in Asia, for example, take it seriously. 

AH: I would argue that it is not. You look at many countries in Asia. Because of the instability of governments and high inflations, most wealthy families change their own properties into gold and hide it from people.

I think the Western societies trust the government far more than any people in the Asia pacific region, where there has been a real history of trying to safeguard properties from ever-changing tides of which governments or which systems of governments are in power. 

I think people in the West trust governments — at least in the United States, where I am from. American people trust that America is a great place. They believe, “They are not gonna screw me.” Look at India, China, and the consumption of gold. Ownership percentage is far above we would see in America or Western Europe. 

I think, in general, demands for Bitcoin and cryptos come from Asia. If you think about many countries where there is instability banking system or is not fully functioning, a very small percentage of people have access to financial services. So, being able to log onto your phones anytime of your day and go onto an exchange, you are not being screwed by a broker or somebody else seeing exactly what is going on. And being able to trade freely Bitcoin or other cryptos is extremely appealing. 

If you look at the U.S. or Europe, they are used to trading on very regulated stock exchanges. There are all different types of financial products available that are heavily banked. The value proposition is just not there. That is why greater adoption and different types of companies are coming to the market here in Asia. 

Bitcoin hard fork

HO: How can Bitcoin achieve financial privacy? 

AH: I think Bitcoin is the most promising to adopt. It has electronic cash-like features. It has such a large user base, large base of developers and organizations building on top of the network. 

But I think Bitcoin, right now, is not financially private. Actually, it is very bad because of the nature of blockchain. One of the reasons why lots of financial institutions don’t take Bitcoin or accept Bitcoin is that they can’t cover their ass. 

When you walk into the bank with millions of U.S. dollars in cash, the banks have to do Know Your Customer (KYC) checks on you. With Bitcoin, because its entire history of that money can be seen in public, if someone or some entity that is not permissioned by the government touches that money, that bank or financial institutions can possibly be liable because there is actually information for them to assess that. 

If you want to break Bitcoin, all you have to do is to start telling financial service institutions that they cannot deal with certain addresses. At a certain point, when one Bitcoin is not equal to another Bitcoin and not fungible across the world, then the entire protocol will be worthless. 

So, I think financial privacy, in terms of Bitcoin, is far from perfect. And Bitcoin will be under attack by malicious governments and other agencies. If they want to stymie the growth of Bitcoin, all they have to do is to start banning addresses. Once you start doing that, you destroy it. So, for Bitcoin to succeed, it is going to be a long run. I think it has to have complete and total anonymity. 

HO: Who would ban Bitcoin addresses?

AH: I think what is really dangerous is the organization called the Office of Foreign Assets Control (OFAC) in the United States. Put one or two Bitcoin addresses on the list of banned individuals or organizations — whatever you want to call it — and any funds held in those particular addresses cannot be touched. So, theoretically speaking, you have now removed certain Bitcoin circulations because exchanges and organizations that are publicly dealing with Bitcoin have to now abide by these rules or go to jail, or whatever. So, automatically, now you basically start to destroy the fungibility of Bitcoin. 

You can’t do the same thing with the U.S. dollar. The U.S. government can’t just say “Oh, this particular U.S. dollar,” because they can’t prove that it has been touched by certain groups. That is why my cash is great for my financial privacy and why governments want to get rid of it. 

HO: How will Bitcoin solve the problem of fungibility then? 

AH: It is a great testing ground for all these anonymous coins that prove what is actually really anonymous. And from my opinion, if Bitcoin really succeeds and takes it into the next level, those anonymity features need to be added via a hard fork of Bitcoin. 

I am not smart enough to know if the cryptography is sound. Maybe we can think of Monero, Zcash, Dash — there are all these different coins, but over time, one of them will prove successful. And as the fungibility of Bitcoin erodes and more and more Bitcoin gets pulled out of circularization because of the addresses that are touched in the past, people will realize that Bitcoin will be slowly being killed, and the only way to liberate it is to do a hard fork and become a truly anonymous Bitcoin. 

The interview has been edited and condensed.

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‘PayPal is F*cked’: BitMEX CEO Says Facebook Libra Will Make Banks ‘Dumb Nodes’

Arthur Hayes claimed that even if Libra has limited success, PayPal in particular has no chance of succeeding.

Facebook’s Libra payment protocol could make central and commercial banks irrelevant, but PayPal has no future anyway, the CEO of derivatives giant BitMEX thinks. Arthur Hayes made the comments in a new interview with Taiwanese news network BlockTempo TV on July 9.

Speaking during this year’s Asia Blockchain Summit (ABS), Hayes made grim forecasts for both banks and fiat-based payment networks. 

Libra, which saw its whitepaper release last month but has yet to launch, has drawn both praise and criticism from across the international economy. 

For Hayes, participants who should be most worried are banks themselves. Even if Libra is a centralized platform which can freeze out specific transactions and users, banks will still face major upheaval.

“All a bank is relegated to is a dumb node that holds fiat currency in electronic form at a central bank,” he said.

A digital token forms just the first offering for Libra, with Hayes considering the future will see Facebook providing loans and other services currently the domain of the banking sector. 

“It has the potential to completely disintermediate commercial banks entirely, and destroy their revenue-generating possibilities,” he continued.

His most damning prognosis, however, was reserved for PayPal, the payment network seeing increasing competition from crypto-friendly players such as Square

“PayPal’s f*cked anyway,” he said, explaining its fate did not even depend on Libra’s success.

The BitMEX CEO is well known for his soundbites pronouncing the death of traditional finance. Last week, however, he courted controversy over the recording of a debate he had at ABS with serial bitcoin naysayer, Nouriel Roubini.

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Dr. Doom Lays Into Bitcoin & BitMEX After Tangle in Taipei

Bitcoin V.S. The World

Yesterday, two behemoths in the Bitcoin (BTC) world butted heads: Nouriel “Dr. Doom” Roubini and Arthur Hayes. The former is a career markets cynic that famously called 2008’s Great Recession; The latter is the chief executive of BitMEX, famous for his no-filter attitude and his eerily accurate crypto market calls.

Held at Asia Blockchain Summit, one of the region’s largest cryptocurrency-related events, “The Tangle in Taipei” debate saw the duo try and trash the other, no holds barred.

While both sides claimed victory, Roubini, a New York University professor, claims that he won. In a tweet following the debate, which was actually barred from being livestreamed/recorded, the Bitcoin skeptic urged BitMEX to release the video. Roubini quipped that he “destroyed” Hayes, before calling the industry executive a coward for not publicly releasing the tapes.

The economist continued his tirade in latter tweets, in which Roubini poked fun at BitMEX for offering high leverage on its cryptocurrency markets, which he suggests is much like a drug of gambling. “Hayes spent half of the debate today defending his shady biz model of peddling 100x leverage crypto derivatives to retail suckers,” Roubini wrote, evidently not fine with the fact that debate ended hours ago.

While many in the cryptocurrency community have dismissed Roubini’s attempt to get Hayes to “release the tapes” as nothing but a bluff, attendees of the event have claimed that the spat was actually closer than the two sides say.

Mike Dudas, the chief executive of trade publication The Block, called the parley “dead-even”, noting that both sides made “strong arguments”. Dudas even went as far as to say that Roubini may have squeaked out a win, snagging an anecdotal “52 to 48” victory.

So, what exactly was said? And, which side many better points?

A Historic Spat

Well, according to notes published by Dudas, Roubini centered his sights on how BitMEX is unregulated, offers “risky” products, could be employing insider trading, could be registering fake Bitcoin volumes, and makes money off “suckers”. While there aren’t any direct quotes from the shouting match, the economist was trying to make it clear that the aforementioned exchange is not a net benefit for the cryptocurrency space, but is instead a way in which BitMEX can accumulate wealth for themselves.

Hayes rebutted by explaining that BitMEX’s growth has been entirely natural, his firm’s operations are honest, and that 100x leverage isn’t mandatory. The BitMEX chief went on to explain that abiding by the regulations of the U.S. isn’t mandatory, because the nation’s regulators aren’t the end all and be all of the cryptocurrency game.

The discussion then took a step back, giving the two a chance to talk more about Bitcoin and blockchain as a whole. As normal, Roubini took the stance that Bitcoin isn’t needed in today’s economy, is centralized, not scalable, has better alternatives, and is backed by questionable characters. Hayes also took his normal stance, claiming that in a world where government-surveyed fintech is becoming commonplace, a private money like Bitcoin is needed.

As someone that wasn’t able to attend the debate for logistical reasons, I can’t tell you who won, or if Roubini’s attempt to get the tapes released is logical. But, soon enough, we should have our answers.

Photo by Almos Bechtold on Unsplash

The post Dr. Doom Lays Into Bitcoin & BitMEX After Tangle in Taipei appeared first on Ethereum World News.

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‘Release the Tape You Coward’ — Roubini Tells BitMEX CEO After Debate

Professional crypto contrarian Nouriel Roubini wants the recording of his debate with the CEO of BitMEX released.

American economist and professional crypto contrarian Nouriel Roubini has furiously demanded the release of a recording of his latest debate with BitMEX CEO and co-founder Arthur Hayes

In one of several fulminating tweets posted on July 2, Roubini accused the organizers of the Asia Blockchain Summit in Taiwan of being part of a “mafia hush money racket” and cowing to BitMEX’s censorship by choosing to neither tape nor broadcast his debate with Hayes during the event. One tweet reads:

“Another @CryptoHayes scam: he didnt allow the blockchain conference to record our debate or beam it live. He controls the only recording of it and will only release heavily edited “highlights”. I destroyed @CryptoHayes in the debate and he is hiding. RELEASE THE TAPE YOU COWARD!”

While Roubini’s well-oiled routine of playing the crypto antagonist is well-known across the industry, the economist appears to be particularly keen on having this latest squabble — dubbed the “Tangle in Taipei” — in the public eye.

Hayes — seemingly more relaxed about the affair — responded to Roubini by assuring him that any tape release would expose his “thin grasp of economics and technology.”

According to Cointelegraph’s reporter at the scene, the Tangle in Taipei was largely a rehearsal of Roubini’s view that the crypto industry is rife with scammers and that its technology is neither secure, decentralized, nor scalable. 

He also reiterated his view of its shortcomings as a payments system, and dubbed the entire space of innovation as a manifestation of “stone age technology, not a digital revolution.”

It remains to be seen whether Hayes’ release of debate highlights will grace ears with another of Roubini’s Taipei soundbites — “there’s nothing smart about smart contracts.”

One conference attendee who says she “endured” Roubini’s debate performance, summarized it as “the entitled view of a privileged man speaking for the underprivileged.”

As recently reported, BitMEX posted record volumes across its operations as bitcoin (BTC) hit $13,000 last month. As the world’s single biggest bitcoin derivatives provider, the platform reported more than $1 billion of open interest on the market, prompting Hayes to declare that crypto winter is resolutely over.

Roubini meanwhile provided fresh insights at the Salt conference in New York this spring, claiming that “crypto is the mother and father of all bubbles.” 

In response to the latest fracas over Taipei, one social media commentator picked up on an apparent Roubini tweet of six-year vintage — back when BTC was in the double-digits —  quipping “Nouriel, what’s the % gained between $58 & $10,000?”

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BitMEX Owner Partners With Trading Technologies to Expand Crypto Trading Base and Tools

A two-way deal will allow BitMEX users to access new market tools, while TT traders will gain exposure to crypto products.

United States-based professional trading infrastructure firm Trading Technologies International (TT) has partnered with the parent company of Hong Kong cryptocurrency derivatives trading platform BitMEX to open up its products to crypto derivatives traders. TT announced the news in a press release on April 17.

As the press release notes, the partnership is between TT and the owner of BitMEX, HDR Global Trading. TT, which offers various market access tools and services, will now offer its market tools to BitMEX traders through its TT platform.

Similarly, TT traders will be able to trade on BitMEX and will now gain access to its crypto products, which include the bitcoin (BTC)-based XBTUSD Perpetual Swap.

“We expect this partnership will grow trading volume on BitMEX, not only through our existing clients who want access to cryptocurrencies, but also through new users keen to leverage professional trading software and enjoy better trading experiences,” Rick Lane, chairman and CEO of TT, commented in the press release.

“This partnership will not only extend BitMEX’s unique services to Trading Technologies’ discerning clients, but advance our mutual vision to unlock access to cutting-edge cryptocurrency products,”  BitMEX CEO Arthur Hayes was quoted as saying in the press release.

The partnership comes on the back of impressive performance for BitMEX, now the second largest crypto trading platform by reported volume in the world.

Despite occasional technical difficulties surrounding sudden bitcoin price moves, the company has seen sustained demand and continues to expand its feature set. This week, Hayes also revealed plans to launch an options exchange within the next 18 months.

Ever buoyant on the future of bitcoin, last month, Hayes added that he foresaw BTC/USD climbing to $10,000 once more by the end of 2019.

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BitMEX CEO: Ethereum ‘Will Quickly Test $200’ When ICO Market Returns

A rebirth of ICOs is on the cards by 2020, and with it a new lease on life for Ethereum, says BitMEX CEO Arthur Hayes.

Initial coin offerings (ICO) will return within “18 months” and Ethereum (ETH) will “rebound aggressively,” BitMEX CEO Arthur Hayes told Cointelegraph Japan Dec. 26.

BitMEX is a Hong Kong-based cryptocurrency trading platform that has become one of the largest trading platforms in the world by volume.

Speaking in an exclusive interview, Hayes forecast a return to form for 2018’s “dead” ICO markets.

“The use case for Ether is primarily ICOs. That market is dead right now,” he said, adding:

“Once there are new issues, then Ether will rebound aggressively. When the ICO market returns, Ether will quickly test $200. The timing of the ICO rebirth is 12 to 18 months out.”

Hayes made the comments following a now rare day of stability across cryptocurrency markets, with ETH/USD staying range bound within 1 percent of $129 after doubling in a week.

One of the top performers in the short term, the once-largest altcoin has seen losses of over 90 percent in 2018.

In the coming 12-18 months, however, Hayes first predicts stablecoins will have their time in the limelight before an ICO resurgence.

“Security tokens and stablecoins will prove attractive sirens for investors in 2019,” he continued, noting:

“While their fundamental raison d’etre is flawed, investors in this time of pain will latch onto anything they believe will be their ticket to easy riches.”

He did not elaborate on whether that market will implode like that of the 2017 ICO boom.

For Bitcoin (BTC), Hayes suggested a fairly small trading corridor for next year — between $1,000 and $10,000. Some sources have argued institutional investors engaging in Bitcoin through new financial instruments will take the price much higher.

Last weekend, Justin Sun, CEO of decentralized application (DApp) development platform TRON (TRX), claimed ETH was “slowly imploding.”

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BitMEX CEO’s Call For Double-Digit Ethereum Comes True: ETH At $90

Arthur Hayes: Ethereum (ETH), A “Double Digit S*hitcoin”

In late-August of this year, Arthur Hayes, the chief executive at BitMEX, the world’s foremost crypto mercantile exchange, took to his firm’s in-house blog to tout some controversial sentiment. In an extensive post, the former institutional trader began his Ethereum (ETH) bash by telling a personal story, hyperbolized to convey a point.

The BitMEX CEO discussed a s*hitcoin named Pepe Cash, an evident combination of a popular internet meme and Bitcoin Cash, and somehow, someway, related it back to Ethereum, which Hayes evidently holds a grudge against. Hayes, imbuing the op-ed with his normal swagger — unfiltered statements, crazy calls, and all — even noted that ETH could “go from a 3-digit to a 2-digit s*hitcoin.”

Backing his statement, which was inflammatory to put it lightly, Hayes drew attention to ICO-funded projects, many of which based their operations around Ethereum, venture capitalists “turned-hedge-fund-punters,” and crypto-centric funds.

Hayes’ chastising of Ether was quite extensive, but the long and the short of it is Hayes believed that there was enough prospective selling pressure to push the asset below $100, which was situated at $200 at BitMEX’s time of press.

While many proponents of Ethereum and “altcoin maximalists” laughed at the industry savant for his sentiment, lambasting the prediction (of sorts) as foolhardy, on Thursday, the asset finally showed signs of falling to double-digits.

At first, during the wee hours of Thursday morning, ETH suddenly flash crashed to $13 on Coinbase Pro — straight out of left field.

Although this move wasn’t backed by a clear catalyst, nor did Coinbase recently a statement on the matter, a number of Ether’s skeptics took to Twitter to claim that the asset’s time was up. Decentralist Kevin Pham, a zealous Bitcoin maximalist and anti-ETH fanatic, took to his Twitter following to claim that both the asset and Coinbase were a “s*hitshow.”

Others also chimed in, with Justin Sun of Tron even telling developers to “plz leave Ethereum and join Tron.” NVK, a pseudonymous crypto commentator, also expressed his/her thoughts, noting that at its core, the aforementioned project is “centralized,” before asking his followers to use Bitcoin and its recently-established Liquid Network to issue tokens.

While ETH subsequently recovered to $100, with those who bought in at the bottom making 770% near-instantly, the asset continued lower on Thursday, following BTC as it slid below $3,500. Eventually, the asset fell under $100, after putting up a fight at that key psychological, technical, and fundamental level for hours on end. As BTC continues to stumble, recently moving under $3,350 in a seemingly endless downtrend, ETH has followed suit, moving to $98 before finding itself rapidly falling to $88, where it has found itself.

So for the second time in weeks, it seems that Arthur Hayes has made a successful prediction against crypto, as the member of BitMEX’s top brass called for BTC to move under $5,000 previously.

Keeping all this tumult in mind, a number of analysts and market commentators took to Twitter to tout their thoughts. Alex Kruger, a prominent crypto-friendly macro markets analyst/investor, posted the photo above, evidently summing up Ether holders’ sentiment in a simple image.

Ethereum Believers Maintain Faith

Although the sentiment touted by traders is undoubtedly bearish, a number of diehard believers in this “world computer” project have maintained their bullish sentiment. Tom Lee, head of research at Fundstrat, recently took to Blockshow Asia to claim that Bitcoin, XRP, and Ethereum all have staying power, due to their status as established networks with purportedly bonafide use cases.

Mihailo Bjelic, a blockchain researcher, took to Twitter to claim that while ConsenSys, an Ethereum development consortium recently downsized, it remains a booming project.

ShapeShift CEO Erik Voorhees, responding to criticism regarding ETH from Peter Schiff, a Bitcoin hater, joked that “[Ether] HODLers are crying all the way to the bank… although they don’t need banks anymore, either.”

Title Image Courtesy of Pedro Gabriel Miziara on Unsplash

The post BitMEX CEO’s Call For Double-Digit Ethereum Comes True: ETH At $90 appeared first on Ethereum World News.

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BitMEX CEO’s Call For Double-Digit Ethereum Comes True: ETH At $90

Arthur Hayes: Ethereum (ETH), A “Double Digit S*hitcoin”

In late-August of this year, Arthur Hayes, the chief executive at BitMEX, the world’s foremost crypto mercantile exchange, took to his firm’s in-house blog to tout some controversial sentiment. In an extensive post, the former institutional trader began his Ethereum (ETH) bash by telling a personal story, hyperbolized to convey a point.

The BitMEX CEO discussed a s*hitcoin named Pepe Cash, an evident combination of a popular internet meme and Bitcoin Cash, and somehow, someway, related it back to Ethereum, which Hayes evidently holds a grudge against. Hayes, imbuing the op-ed with his normal swagger — unfiltered statements, crazy calls, and all — even noted that ETH could “go from a 3-digit to a 2-digit s*hitcoin.”

Backing his statement, which was inflammatory to put it lightly, Hayes drew attention to ICO-funded projects, many of which based their operations around Ethereum, venture capitalists “turned-hedge-fund-punters,” and crypto-centric funds.

Hayes’ chastising of Ether was quite extensive, but the long and the short of it is Hayes believed that there was enough prospective selling pressure to push the asset below $100, which was situated at $200 at BitMEX’s time of press.

While many proponents of Ethereum and “altcoin maximalists” laughed at the industry savant for his sentiment, lambasting the prediction (of sorts) as foolhardy, on Thursday, the asset finally showed signs of falling to double-digits.

At first, during the wee hours of Thursday morning, ETH suddenly flash crashed to $13 on Coinbase Pro — straight out of left field.

Although this move wasn’t backed by a clear catalyst, nor did Coinbase recently a statement on the matter, a number of Ether’s skeptics took to Twitter to claim that the asset’s time was up. Decentralist Kevin Pham, a zealous Bitcoin maximalist and anti-ETH fanatic, took to his Twitter following to claim that both the asset and Coinbase were a “s*hitshow.”

Others also chimed in, with Justin Sun of Tron even telling developers to “plz leave Ethereum and join Tron.” NVK, a pseudonymous crypto commentator, also expressed his/her thoughts, noting that at its core, the aforementioned project is “centralized,” before asking his followers to use Bitcoin and its recently-established Liquid Network to issue tokens.

While ETH subsequently recovered to $100, with those who bought in at the bottom making 770% near-instantly, the asset continued lower on Thursday, following BTC as it slid below $3,500. Eventually, the asset fell under $100, after putting up a fight at that key psychological, technical, and fundamental level for hours on end. As BTC continues to stumble, recently moving under $3,350 in a seemingly endless downtrend, ETH has followed suit, moving to $98 before finding itself rapidly falling to $88, where it has found itself.

So for the second time in weeks, it seems that Arthur Hayes has made a successful prediction against crypto, as the member of BitMEX’s top brass called for BTC to move under $5,000 previously.

Keeping all this tumult in mind, a number of analysts and market commentators took to Twitter to tout their thoughts. Alex Kruger, a prominent crypto-friendly macro markets analyst/investor, posted the photo above, evidently summing up Ether holders’ sentiment in a simple image.

Ethereum Believers Maintain Faith

Although the sentiment touted by traders is undoubtedly bearish, a number of diehard believers in this “world computer” project have maintained their bullish sentiment. Tom Lee, head of research at Fundstrat, recently took to Blockshow Asia to claim that Bitcoin, XRP, and Ethereum all have staying power, due to their status as established networks with purportedly bonafide use cases.

Mihailo Bjelic, a blockchain researcher, took to Twitter to claim that while ConsenSys, an Ethereum development consortium recently downsized, it remains a booming project.

ShapeShift CEO Erik Voorhees, responding to criticism regarding ETH from Peter Schiff, a Bitcoin hater, joked that “[Ether] HODLers are crying all the way to the bank… although they don’t need banks anymore, either.”

Title Image Courtesy of Pedro Gabriel Miziara on Unsplash
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BitMEX Leases The World’s Most Exorbitant Offices In Hong Kong

BitMEX has hit the crypto printing press again, with the Hong Kong Economic Times, a local newspaper, reporting that the exchange had signed an agreement to rent out the world’s most expensive office spaces.

BitMEX, founded by former Citigroup trader Arthur Hayes has reportedly leased out the whole 45th floor of the Cheung Kong Center. This information comes anonymously via individuals allegedly knowledgeable about the firm’s plans.

While any piece of Hong Kong real estate is already expensive in and of itself, Cheung Kong Center, which is also home to Goldman Sachs, Barclays, the Bank of America and Bloomberg, has one of the highest $/Sq.ft ratios in the world.

In January, when Bloomberg interviewed Hayes, they discovered that the firm’s Hong Kong offices at the time were located in a lesser-known warehouse district, where rent is HK$25 ($3.18) for each square foot. But with the firm’s move to Cheung Kong, which is smack dab in one of Hong Kong’s flashiest districts, BitMEX will need to pay a staggering HK$225 per square foot, a near ten-fold increase from the rent requirements of their previous office.

According to the Hong Kong Economic Times, the outlet that first broke this news, the 45th floor consists of 20,000 square feet, which will mean that the exchange will pay the equivalent of over $573,000 a month in rent.

Some legacy market cynics see this as sort of ‘power play’, with BitMEX’s appearance in such an office space alluding to the fact that crypto is here, and is here to stay for the long haul. Others see this as a strategic move, with such a move putting the exchange within arms reach of the most influential financial and technology firms in the world. But most importantly, this move shows that BitMEX has still been raking copious amounts of profit in, even as the crypto market has essentially fallen off a sharp, tall cliff.

BitMEX’s Growing Influence Over The Crypto Industry

As reported by Ethereum World News, the market surged after BitMEX announced that it would be temporarily shutting down to do maintence work on its engine. While this announcement may seem mundane on the surface, Bitcoin rose by nearly $500 in the minutes following the commencement of BitMEX’s downtime. Altcoins followed closely behind the market leader, posting similar gains in terms of percentage.

Even as BitMEX’s one-hour of downtime finished, the market held its gains (temporarily at least), with Bitcoin finding a place to stand at $6,700. While some speculated that this bout of positive price action was just an untimely coincidence, many noted that such a move could only be attributed to the scheduled maintence of the world’s largest Bitcoin exchange.

Issuing a tweet regarding this occurrence, Crypto commentator and ”s***poster’ EmptyBeerBottle drew attention to the fact that this move indicates the vast amount of influence the exchange has over the market. As such, the crypto personality noted that BitMEX should not be discredited, as the exchange has evidently become an integral part of this nascent industry and market.

Photo by Jason Wong on Unsplash

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Experts Have Quite Contradictory Opinions Regarding BTC ETF Approval and Its Importance

A few days ago, the Winklevoss brothers’ request to start a Bitcoin ETF was denied after a controversial SEC decision that served as a catalyst to increase bearish sentiment in the crypto-investor community after an excellent week in which Bitcoin and the rest of the cryptos seemed to had bounced back to new heights.

Following the SEC decision, a controversial letter issued by Comm. Hester Pierce, in which she publicly stated her dissent sparked the debate in the community, giving a touch of optimism to bulls and hodlers who quickly saw her as their voice in the SEC.

Bitcoin ETF: A Complicated Topic

Ran Neu-Ner

There are still at least 4 Bitcoin ETF applications left for this year. The contradiction between the SEC’s background as a “denier” of opportunity and Pierce’s vision as promoters of innovation has allowed experts to provide media with interesting insights into Bitcoin’s future at the regulatory and institutional levels, and especially about the possibility of ETFs and the impact these decisions would have on the market.

Ran Neu-Ner, host of the “Crypto Trader” show aired on CNBC in Africa, had a conversation with a panel of experts in the field, and although the opinions were solidly based on arguments, they were somewhat contradictory:

Michael Sonnenshein, Managing Director – Grayscale Investments

Michael Sonnenshein

Mr. Sonnensheim does not believe in the possibility of a Bitcoin ETF being approved during 2018. When asked about it, this was his answer:

“so it’s really hard to say… I think that there are still quite a few concerns that the SEC has. If you look at the recent letter they published when they denied the Winklevoss ETF they’re still looking at a lot of factors within the underlying market including surveillance, regulation and to the best of my knowledge many of those things haven’t changed just yet.”

When asked about the importance of a Bitcoin ETF for the ecosystem, Mr. Sonnenshein does not consider it to be so relevant:

“I think it’s actually not as important as people make it seem … we’re actually seeing the institutional inflows into this space despite the fact that there isn’t an ETF.”

Arthur Hayes, CEO – Bitmex

Arthur Hayes

Mr. Hayes is not sure about a prediction regarding a Bitcoin ETF approval on 2018. When he was first asked about it he said:

“I actually took a look at the SEC website and there are two ETFs that have decision dates in q3 and September and two that have decision dates in q1 February of next year so I’d say there’s probably a 50/50 chance that we see some decision in q3 again and then again we have another to each yes looking for approval in February of next year”

However, at the end of the interview, Mr. Neu-Ner asked him to answer with one word: Will there be an ETF Bitcoin by the end of 2018? To which Mr. Hayes replied: “Yes.”

For Mr. Hayes an ETF Bitcoin is critical to the community:

“ it’s very important to get more retail money into the system because at the end of the day retail traders don’t want to have to worry about securing a Bitcoin wallet, where do they buy it from, using the different exchanges… so if all they have to do is click on an e-trade … they could buy an ETF which gives an exposure to Bitcoin but not allow them to actually experiences the risks of holding it that’s a very powerful way for them to get involved”

Mr. Hayes still maintains his position that Bitcoin (BTC) is “one ETF away” from reaching a value of 50k USD

Mark Brady, former ETF builder – Blackpool

MArk Brady

Mr. Brady considers that from a pragmatic point of view, an ETF represents a great opportunity, so he considers it to be of particular importance to the crypto sphere:

“Well I think from the standpoint of mass retail acceptance it’s very important when you think of an ETF it’s basically a container that allows you to put in different underlying assets that may be difficult for average retail investor to get exposure to”

When asked about the possibility of a Bitcoin ETF being approved in 2018, his response was stark:

“Very unlikely.”

The main reason is that he does not see a sufficiently regulated market in the near future to create the necessary conditions for an ETF.

Mati Greenspan, Senior Analyst – eToro

Mati Greenspan

Mr. Greenspan was perhaps the most ambiguous or conservative of all. Regarding the possibility of spotting a Bitcoin ETF by 2018, he said:

“Before the end of 2018, it doesn’t seem likely; however, it is a possibility for the first quarter of 2019.”

According to Greenspan, the SEC is likely to postpone some of its decisions until 2019, when the market will have a higher level of maturity.

Regarding the importance of Bitcoin ETF, he considers it important but does not give it much relevance.

“So yes it could be a good thing in that it’ll bring fresh money into the market new liquidity into the market is a very good thing and very healthy for the ecosystem
I don’t think that it’s the most important thing in the world, but if the ETF is approved what happens to the Bitcoin price most likely it’ll go up.”

Full show available here:

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