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Breaking: Owner of NYSE Partners with Microsoft, BCG and Starbucks to launch a Global Bitcoin Market

Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), is partnering with Microsoft, Starbucks, BCG and others, to launch a market and ecosystem to list physically settled Bitcoin futures contracts and for a new company to push Bitcoin and other digital assets towards becoming mainstream financial asset.

The new company will be known as Bakkt and intends on leveraging Microsoft’s could solutions to create an open and regulated, global ecosystem for digital assets. The integrated platform will enable consumers and institutions to buy, sell, store and spend digital assets on the seamless global network.

Kelly Loeffler, CEO of Bakkt, is quoted as saying the following with regards to the new company:

Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility. We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.

Bakkt will initially integrate with ICE’s U.S futures market and clearinghouse to list a physically settled one-day Bitcoin futures product. This will include physical warehousing managed in-house by ICE. This new product is slated for launch in November and is awaiting regulatory approval. In addition to the Bitcoin futures product, Bakkt will be a full-fledged platform to promote the adoption of digital assets as mainstream financial assets as earlier mentioned.

Jeffrey C. Sprecher, Founder, Chairman, and CEO of Intercontinental Exchange, is quoted as follows with regards to the launch of Bakkt:

In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets.

Maria Smith, Vice President, Partnerships and Payments for Starbucks, explained how the company will play a role in the partnership:

As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks.

As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.

Similar sentiments were echoed by Sean Collins, Senior Partner, BCG:

Blockchain technology holds tremendous potential to enable new business models and trusted ecosystems. By leveraging and developing fundamental market infrastructure, the Bakkt platform will enable firms across industries to accelerate a range of innovation.

Other investors in Bakkt are expected to include – but not limited to – an affiliate of Fortress Investment Group, Eagle Seven, Galaxy Digital, Horizons Ventures, Alan Howard, Pantera Capital, Protocol Ventures, and Susquehanna International Group, LLP.

More information with regards to the launch of Bakkt will be announced in the coming weeks.

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Bitcoin Price Defends $6K As Upside Potential Builds

Bitcoin (BTC) may be up slightly at the start of Friday’s session, but it remains to be seen if it can build traction above $6,000.

The world’s largest cryptocurrency by market capitalization is now down 37 percent from its May 5th high at $9,996 according to CoinDesk’s Bitcoin Price Index, though it’s rebounded to a crucial support zone at $6,235, according to Bitfinex data.

The figure is notable, as it could be argued bitcoin needs a daily close above the previous low at $6,070 to abort bearish outlook for the coming week. This would provide greater confidence to the market as a whole, and could possibly spark another minor bullish revival seen over the last eight days.

And so far in today’s session, it appears a bullish reversal pattern might be playing out.

The inverse head and shoulders pattern as reported by CoinDesk yesterday continues to remain in play as the bears were unable to push the right shoulder below the neckline located at $6,064, adding to the strong possibility of a head-and-shoulders reversal.

Daily chart

Provided the H&S pattern stands, the Fibonacci Retracement tool (taken from previous high on May 5 to July 12 bottom of the current bullish reversal candle) shows significant resistance awaits at $6,400, $6900, $7,021 and $8,046.

The 55 exponential moving average (red line) also remains well above  the current price, which suggests the troubled crypto remains bearish in the long term until prices start to crash through the crucial $7,000 resistance zone.

Further, the channel between $6,070 and $7,012 remains an incredible uphill battle for the world’s most infamous digital cryptocurrency.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) on the daily so far offers some solace to back the current H&S reversal which is currently bouncing from the 41.8 point line, previously seen as resistance.

If it holds above and remains within the channel (between 41 and 53) another attempt to push toward previous resistances at $6,472 could be possible.

View

  • Bitcoin risked falling below the current inverse H&S neckline around $6,073 but has since recovered slightly to keep the pattern in play.
  • RSI has yet to dip significantly – adding room for further upward momentum
  • Acceptance below $6,000 would invalidate bullish technical setup.
  • Bulls would like acceptance above $6,400 to abort short-term bearish perspective.

Disclosure: The author holds USDT at the time of writing.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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What Crypto Investors Can Learn from Billionaire George Soros

Tanzeel Akhtar is an independent British journalist whose work has been published in the Wall Street Journal, CNBC, FT Alphaville, Investing.com, Forbes, Euromoney and Citywire.


Recent news that George Soros’ $26 billion family office is entering the cryptocurrency market has many investors speculating about the likely impact.

But one of the billionaire’s most famous ideas might be even more important to understanding how the market functions, with or without his participation.

For those unfamiliar with this powerful palindrome: In the world of economics and finance, Soros is feared and known as “the man who broke the Bank of England” when he made $1 billion in one day, September 16th, 1992 (known as Black Wednesday). This is one institutional player with the ability to go large and make or break a currency … even a digital one.

Soros has attributed his success in part to his understanding of what he calls reflexivity. In simple terms, this theory states that investors base their decisions not on reality but on their “perception” of reality.

According to reflexivity theory, there are two realities: the objective and subjective. Soros explains that the subjective aspect covers what takes place in the mind and the objective aspect is what takes place in external reality.

Reflexivity connects any two or more aspects of reality, setting up two-way feedback loops between them. In this way, actions resulting from each reality, the objective and the subjective, will affect investors’ perceptions, and therefore prices. Soros has cited the global financial crisis of 2008 as an illustration of the theory.

Markets, he reckons, are in a constant state of divergence from reality and far from accurately reflecting all the available knowledge, instead representing almost a distorted view of reality.

“The degree of distortion may vary from time to time,” Soros once wrote, adding:

“Sometimes it’s quite insignificant, at other times it is quite pronounced. Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend.”

He goes onto explain that when positive feedback develops between the trend and the misconception, “a boom-bust process is set in motion.” This is tested by negative feedback along the way, and if it is strong enough to survive these tests, both the trend and the misconception will be reinforced.

‘Near-religious’

So, how does his theory apply to the crypto market? For starters, we do see these feedback loops.

The more people form a positive view on bitcoin, the more the price will soar, and vice versa. This is what happened late last year: when the price of bitcoin jumped, it attracted more users, which further juiced the price, which brought in more people.

Crypto markets are just as prone to the phenomena of irrational exuberance, bias or opinionated actors as any other market, said Omri Ross, assistant professor at the University of Copenhagen and CEO of Firmo Network, a smart-contract startup.

Further, the community’s famous cultishness amplifies these effects, he said.

“The reflexivity of economic actors is confirmed by the proliferation of subcultures and fan groups emerging around various projects,” Ross said. “In the young and volatile crypto markets, near-religious beliefs about price appreciation with references to various intrinsic valuation models can be observed daily.”

Another area where reflexivity applied, for a time, is in the initial coin offering (ICO) sector, where momentum drove up prices, said Shane Brett, co-founder and CEO of GECKO Governance, a regtech startup. But it lasted only so long.  

“Recently, however, discussions around compliance, not to mention fraudulent ICOs, have caused some investors to retreat,” Brett said. “Conversely, institutional investors are keen to invest in the market, but in the absence of compliance, are remaining on the sidelines, contradicting this theory.”

Nobody really knows what the long-term effect will be of Soros’ entry into the crypto markets, only months after he joined other elites at Davos in calling bitcoin a bubble. Things are about to get more interesting.

But we can learn from his insights about the circular relationship between cause and effect, and the role of cognitive function in a new, developing and volatile market.

George Soros image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Price Climbs to 40-Day High Above $9,200

Bitcoin’s price climbed above $9,200 on Tuesday to hit a 40-day high, according to data from CoinDesk’s Bitcoin Price Index (BPI).

Following a steady increase over the past week, the price of world’s largest cryptocurrency by market capitalization jumped above $9,000 soon after the morning trading session began around 00:30 UTC, after which it continued to climb up to as high as $9,220.97 at around 2:00 UTC.

The price is at its highest point since March 14, when bitcoin dropped $800 within one trading day to reach a one-month low around $8,000. Following the plunge, the cryptocurrency’s price declined to as low as $6,593 on March 30, reflecting what is now a 39% gain since that market bottom.

The wider cryptocurrency market has seen price growth in the past month as well, climbing above $400 billion in terms of total capitalization, according to data from CoinMarketCap. That figure has shifted between $200 billion and $300 billion since March 18.

Currently, four out of the five largest cryptocurrencies by market capitalization are all seeing their prices at one-month highs, market data shows. Ethereum, the world’s second largest cryptocurrency, is now above $660 after recently dropping below $400. The price of bitcoin cash has nearly doubled in the week since April 18, climbing back above $1,500 as of press time.

Climbing image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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A Bitcoin Rally After Tax Day? Don't Bet the Farm

Tanzeel Akhtar is an independent British journalist whose work has been published in the Wall Street Journal, CNBC, FT Alphaville, Investing.com, Forbes, Euromoney and Citywire.

The following article is an exclusive contribution to CoinDesk’s Crypto and Taxes 2018 series.


When tax season ends, will the crypto bear market end with it?

With the April 17 U.S. deadline to file approaching, there’s much speculation that the crypto winter of 2018 was largely due to investors frantically selling to raise funds, so they could pay taxes on 2017 gains.  

“We may look back on this time as the ‘Crypto Tax Crisis of 2018,’ as thanks to tax liabilities we’re witnessing the most concentrated period of net fiat outflows that the cryptoasset ecosystem has experienced in its short life,” Chris Burniske,  a partner at Placeholder VC, and Jonathan Cheesman wrote in a recent, highly detailed Medium post.

And there has almost certainly been some tax-related selling, judging from posts on Reddit and various cryptocurrency forums from investors who had cashed out cryptocurrency during the December run-up and became concerned about their tax liability.

“I didn’t know this back then but it looks like I owe income taxes on those trades, which adds up to about $50,000 if I add up state (California) and federal,” a Redditor who goes by the handle of thoway wrote a month ago.

Further, Japan’s tax deadline was March 15th. Like, the U.S., Japan is a huge participant in the crypto market, so this would further support the thesis.

But there are several reasons to discount the contribution of such selling to the recent market rout – and thus the probability that prices will suddenly surge again after Tax Day.

Coming up short

First of all, investors who sold during the slump would not likely have raised enough to cover their tax liability. Perry Woodin, Chief Strategy Officer at HashChain Technology, Inc, did the math.

“Imagine an individual who purchased 1.5 bitcoins in January of 2017 for $1,200 a bitcoin,” Woodin told CoinDesk. “If that individual sold one bitcoin in December of 2017 they could have realized a gain of ~$18,000. This short term gain is taxed as ordinary income in the U.S. Assuming a tax rate of ~30%, the tax liability would be about $5,400.”

As we spoke in early April, bitcoin was trading around $6,700. Hence, Woodin said, in his hypothetical example, “the remaining 0.5 bitcoin (or $3,350) is not enough to pay the $5,400 tax liability.”

So, tax-driven selling would have been irrational. Of course, people don’t always behave rationally.

Trevor Gerszt, CEO of CoinIRA, a company that specializes in digital currency individual retirement accounts (IRAs), gave another reason to doubt a strong connection between the crypto slump and tax selling. He pointed to the recent activity on the bitcoin blockchain, or lack thereof.   

“If tax selling were really a driver of bitcoin prices, we would expect to see a spike in selling, yet confirmed transactions have been relatively low and have remained that way for the past two months,” Gerszt said on Tuesday.

To be sure, major exchanges started batching transactions in the first quarter, so the number of liquidations reflected on the public ledger might be understated.

Eric Ervin, CEO of Reality Shares, which has launched an exchange traded fund (ETF) investing in blockchain technology, said taxes were certainly a factor in the performance of crypto, but not the primary one, as evidenced by the timing of the dips.

“The market selloff began in December, first bottoming in February, and now we are retesting the lows we saw in February,” Ervin said Tuesday.

Source: CoinDesk’s Bitcoin Price Index

There’s no point in trying to sell your crypto holdings in a panic just because Uncle Sam is knocking on your door. If worse comes to worse, you will have to work with the IRS, set up a payment plan and then hope for a recovery in crypto markets.

And if you’re going to buy in anticipation of a recovery, don’t hold your breath for it to happen right after Tax Day.

Spring flower image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Some Crypto Assets Are Trending Up Amid Today's Drop

The vast majority of cryptocurrencies may be down on the day’s trading, but new data suggests that some assets are trending up this afternoon.

As reported earlier today by CoinDesk, both bitcoin and the wider cryptocurrency market saw significant declines this morning, sending some assets as low as 30% or more in price and dropping the overall market capitalization below $500 billion. The rout also marked a significant turnaround from the gains seen earlier this week.

Market data suggests that in the hours that followed, some of the cryptocurrencies caught up in the rout are trending upwards.

During the afternoon trading session between 12:01 UTC and 18:00 UTC, the cryptocurrency RaiBlocks rose by 16.8 percent. By comparison, the Santiment Network Token climbed by 13.12 percent during that period.

Two other cryptocurrencies, QASH and Veritseum, saw minor gains within the session, with those prices increasing by 2.12 percent and 1.43 percent, respectively.

A fifth cryptocurrency, bitcoin cash, climbed 1.42 percent during the period. Yet as other of the top-10 cryptocurrencies today, BCH and the other four assets are down compared to their market highs from this week.

Several cryptocurrencies experienced notable declines during the afternoon session. Of those, dogecoin declined the most, falling by 14.3 percent in that time. Status and IOTA fell by 13.28 percent and 12.87 percent, respectively.

According to CoinDesk’s Bitcoin Price Index (BPI), the price of bitcoin fell to as low as $10,834.94 at 14:23 UTC, a figure that has since rebounded. At the end of the afternoon session, the cryptocurrency’s value was roughly $12,935.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase (GDAX’s operator). 

Market graph image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Bitcoin Price Drops Below $15k, Down 25% from All-Time High

The price of bitcoin is down more than percent from the all-time high of nearly $20,000 reached this past weekend, market data shows.

Prices fell to as low as $14,502 during today’s trading session, according to CoinDesk’s Bitcoin Price Index (BPI), about 25 percent from the all-time high of $19,783 reported on Dec. 17.

Overall, bitcoin has seen several notable price drops following Sunday’s gains, including a dip below $17,000 on Tuesday that accounted for a roughly $1,800 drop on the day. Indeed, analysts have suggested that the price could experience continued volatility as 2017 comes to a close and new money, brought in by bitcoin’s meteoric gains, exits for fiat.

But, others may be testing the waters in alternative cryptocurrencies, as bitcoin is far from alone in having seen its price decline after recently hitting an all-time high.

According to data from OnChainFX, which charts price developments for cryptocurrencies, all of the top-20 coins by market capitalization saw an all-time high within the past four days. Of those, cryptocurrencies like bitcoin cash, dash and litecoin have posted declines in the last 24 hours.

Dropping water image via CoinDesk archive

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.