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CNBC Draws Flak For Upcoming “Bitcoin: Boom or Bust” Documentary

CNBC ‘Embraces’ Crypto With Fully-Fledged Documentary

CNBC has quickly become near-infamous in the cryptocurrency community for its controversial coverage of this asset class. And while the mainstream media outlet’s coverage of crypto has been criticized time and time again, it seems that the firm’s higher-ups aren’t fazed, recently revealing that CNBC would be airing a Bitcoin-centric documentary.

On Saturday afternoon, the American CNBC news outlet announced that it would be airing a documentary that would “explore the world of bitcoin.” In a press release issued a few days earlier, CNBC wrote the following regarding the description of the documentary:

This documentary is an eye-opening journey that proves to be as informative as it is entertaining and unexpected. Lee offers viewers a rare look inside the wild world of bitcoin, uncovering the unusual landscape and cast of characters surrounding it, and ultimately, allowing viewers to take their own side in the crypto craze.

Along with the reveal of the documentary’s name — “Bitcoin: Boom or Bust” — the firm also unveiled a 90-second trailer, which was likely aimed at getting users interested for the Monday, August 27th air date. Instead of building hype, however, the release of this announcement has seemingly backfired, with crypto enthusiasts, personalities, analysts and investors coming out en-masse to pick apart the short, yet contentious trailer.

Firstly, users came out to berate the outlet for its use of “HODL,” a term that has been immortalized in the heart of the cryptocurrency community. In the trailer, CNBC host Mellisa Lee, draws attention to HODL, noting that it is a popular acronym for “hold on for dear life.”

As Ricardo Spagni, a foremost Monero developer, points out, HODL is not an acronym, but rather an insignificant, yet hilarious typo that gained a cult following in the crypto community following late-2013. Spagni, poking fun at the outlet’s use of the term, wrote:

It’s not an acronym, you incompetent buffoons. Please do the tiniest bit of research FIRST!

Last but not least, the documentary’s focus on a Bitcoin diehard, dubbed “Crypto Kid,” who seems to be set on portraying his somewhat over-the-top character, instead of providing viewers with an informative look into Bitcoin and related topics. Bitcoin millionaire Crypto Kid, whose legal name is Justin, is such a diehard that he apparently sold a majority of his worldly possessions for crypto, and now lives in a treehouse as an expression of his “frugal” lifestyle.

While there isn’t anything inherently wrong with “Crypto Kid,” many critics stipulated that a focus on a more relateable cryptocurrency enthusiast would have been a better choice for viewers.

Twitter user Hector Hernandez proposed for CNBC to interview industry leaders, like Andreas Antonopoulos or Nick Szabo, as he speculated that the outlet was trying to “ridicule the crypto movement.”

Anyhow, keeping the trailer (and the subsequent response of cryptocurrency investors) in mind, it would be no surprise if Monday’s full release of the documentary will result in an even harsher round of backlash for CNBC.

Photo by Andre Francois on Unsplash
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Prominent Investor: This Bitcoin Bear Season May Last For A While

Although the market has begun to recover, albeit ever so slightly, there are some industry leaders that aren’t convinced that Bitcoin is back in bull mode just yet.

“Bitcoin Will Bottom, Then Go Sideways”

Anthony Pompliano, the founder of the crypto/blockchain-centric Morgan Creek Digital Assets, recently appeared on Ran Neuner’s “Crypto Trader” show to express his bearish outlook on this fledgling market.

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Pompliano, who goes by “Pomp” in many circles, opened up his segment discussing the fact that the bear market, which began near the start of 2018, may be far from over.

Responding to Neuner’s query regarding the bear market, Pomp stated:

I think if you look across the historical context with these parabolic runs — we’ve seen the drawdown of about 70% or so, we’ve seen a couple in the past that have been worse that have been right into the 80-85%. But I think what ends up happening is when you get a long drawdown that we have just seen, we will hit a bottom at some point and then go sideways for a while.

Later elaborating on his timeline prediction for this prediction, the Morgan Creek executive brought attention to the approximately 400-day correction that Bitcoin underwent following the Mt.Gox hack. Somewhat likening this correction to the aforementioned, Pomp added that 2018’s correction could be “quite long.” While he did not give any solid numbers in this statement, it is implied that he expects for this drawdown, pullback, or whatever you want to call it to last for a few more months at the very least.

He went on to add that the value of Bitcoin, along with other crypto assets, have not put in a bottom as of yet, but added that it is “hard to tell” exactly where price levels will head. But citing data compiled and analyzed by Morgan Creek, Pompliano noted that Bitcoin could bottom out anywhere within the $3,000 to $4,000 range.

To further back this prediction, the Morgan Creek executive noted that his firm is ready to allocate fiat to the market at those levels, alluding to the fact that a $3,000 to $4,000 Bitcoin would be a good zone of accumulation.

This forecast mirrors what Pomp pointed out in a recent Morgan Creek Digital Assets letter, relayed by CCN, in which he wrote that Bitcoin could fall as low as $3,000 in the upcoming months.

An Influx of Capital Catalyzed Last Year’s Bull Run

CNBC host Neuner went on to question Pomp about last year’s bull run, asking the investor about the catalysts behind Bitcoin’s historical run from $1,000 to near-$20,000 within a year. The Morgan Creek founder first brought up the idea of governmental restrictions, noting that if a ban is placed on a specific asset, asset class or industry, that it will counterintuitively see an influx of buying pressure, rather than selling pressure.

This was evidently seen in crypto with the Chinese government, who banned the purchase, sale, and trade of cryptocurrencies and ICOs multiple times in mid to late-2017. Secondly, Pomp noted that last year’s influx of capital, from retail and institutional investors alike, can be also attributed to last year’s astounding bull run. He added that enough money came in to lay the “groundwork and infrastructure for the next five to ten years.” Even today, there is still capital inflow, even in the face of a bear market, which he sees as a “positive sign for the future.”

Last but not least, he drew attention to the network effects of these public blockchains. For those who are unaware, a network effect is a correlation between the number of individuals using a network and the value of such a network. As Bitcoin surged last year, the number of active wallets and individuals using the blockchain surged, making BTC inherently more valuable

Although Anthony Pompliano’s outlook may seem bearish on crypto in the short to mid term, it is clear that he is ready to pack it in for the long haul.

Photo by Janko Ferlič on Unsplash
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BTCC Founder: The Next Bitcoin Halving Will Push Prices To $60,000

Bobby Lee: Bitcoin Set To Surpass $60k, It’s “Simple Math”

The cryptocurrency market has had its fair share of bulls and bears over the years. Bobby Lee, the co-founder of the BTCC exchange and Charlie Lee‘s brother, ostensibly falls into the former category, recently issuing a series of tweets regarding his undying bullish sentiment on Bitcoin.

On Friday afternoon, industry veteran and Bitcoin bull Bobby Lee revealed that he fully expects for the price of the foremost crypto asset to skyrocket to $60,000 “in the coming years.” Along with reaching $60,000 a piece, the crypto entrepreneur noted that the total market capitalization of the asset will surpass $1 trillion, which would put Bitcoin on par with the value of some legacy markets. He added:

That will be a huge for , and it‘ll lead to more price stability, higher global liquidity, and even faster adoption worldwide.

This statement alludes to the fact that $1 trillion will be an important mental barrier for Bitcoin to cross, as once it does, ‘nocoiners’ may begin to see that this nascent asset class holds true value.

While predictions are often educated guesses at best, Lee made it sound much more like a certainty rather than a forecast, which only goes to show that he is hard-set on portraying himself as a Bitcoin bull.

Mining, Halving, And Liquidity

However, Lee quickly received a lot of flak from Bitcoin pessimists, with many noting that his reasoning behind the prediction was shallow and vague at best. Seemingly responding to the criticism, the BTCC executive later issued a series of tweets that were meant to bring credence to his aforementioned prediction.

Lee first brought up the idea of mining and Bitcoin’s next halving, referencing his seven years of experience in the industry. he wrote:

When I started in 2011, daily global output (new BTC x price) was at $36,000. In 2015, this went to $1.8m. Today, we are at $12m. It means that globally, hashpower keeps going up, using up to $12m electricity costs.

The BTCC co-founder went on to note that if the Bitcoin Network’s hashrate continues to grow non-linearly, coupled with 2020’s block reward halving (900 BTC/Day), the price of the asset will be pushed up to new heights. Doing some napkin math, he noted that if the Bitcoin miners use up $54 million worth of electricity a day, Bitcoin could easily see the $60,000 price level that he mentioned earlier.

He added that this all goes back to the liquidity needs of this market, noting that if Bitcoin’s daily demand eclipses $54 million a day, prices will move to, if not beyond $60,000. Lee even noted that this price forecast is a case of “simple math.”

Oddly enough, he made no mention of altcoins, so it remains to be seen whether he holds this bullish prediction for the over 1,800 other crypto assets that are actively traded today.

Photo by Icons8 team on Unsplash

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Crypto Execs Remains Bullish, Even Amidst Bearish Setbacks

The cryptocurrency market has had its fair share of fluctuation in the past year or two, with the price of crypto assets reaching all-time highs, just to crash by over 70% subsequently. While this near-unpredictable price action has irked some shorter-term investors (speculative traders), two crypto-centric company execs, Hunter Horsley of Bitwise and Spencer Bogart of Blockchain Capital, recently appeared on Bloomberg to express their continued bullish attitude.

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Firstly, Bitwise CEO Horsley noted that investors may be starting to realize that they overreacted to the SEC’s recent “outright” denial of the Winklevoss’ Bitcoin ETF and the “procedural extension” of the VanEck and SolidX ETF verdict. Backing up this statement, Blockchain Capital partner Bogart noted that regulatory bodies are “running out of reasons to disapprove these things (ETF proposals),” as US-based exchanges have begun to adhere to the SEC’s concerns.

Additionally, Bogart added that the volatility seen in the current state of the crypto market shouldn’t be an issue, as any early-stage industry will experience vast fluctuations in price as investors try to accurately pinpoint a proper value for a certain technology, network, etc.

Bitwise CEO: There’s Still Interest For Crypto, Its Just About The Timing 

Emily Chang, the Bloomberg host leading this segment, then asked the two executives about the current levels of interest in this industry. Bitwise’s CEO, seeming ready to answer such a question, responded by stating:

This is a great question. Over the last few months, we have raised a few million dollars a month. I think what we’ve seen is that this month will be larger than last month… There’s (still) a huge amount of interest and people are wondering on the timing. They don’t want to catch a falling knife — they know that they want to do something, but they don’t know when.

He later brought up the example of the amassment of firms Bitwise has talked to, noting that 75% of 500 representatives from hedge funds, pension groups, family offices, and more would consider making a capital allocation into crypto. Horsley also noted that these firms will need to get comfortable with a crypto investment thesis before making a foray.

Expanding more on this interest, Bogart drew attention to other fundamental indicators, such as the number of developers active in developing blockchain-related solutions and the institutions that are starting to stand behind this nascent industry. The Blockchain Capital partner specifically brought up the example of Goldman Sach’s crypto trading desk, which Ethereum World News has reported on in the past, along with custody solutions for security-wary funds who have invested in digital assets.

But then again, as any logical industry leader would point out, Bogart points out that it obviously makes sense why crypto is in a slump now, as the bull run seen in 2017 was evidently unsustainable. Seemingly sharing a near-identical mindset, Bitwise’s executive added that the worldwide deployment of crypto assets and crypto-related (blockchain-related) technologies may take upwards of 10 years, as the internet did.

Closing off this interview, Bogart issued a short, but sweet statement about where the crypto market is now, and where it is headed in the near future. He stated:

The overall time is the biggest tailwind here… I think that this is market that is emerging outside of the core of the legacy financial industry, but its head directly for it.

Photo by Giovanni Calia on Unsplash

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CryptoOracle Co-Founder: Bitcoin Is Functionally Better Than Gold

“Some Gold Users Will Likely Switch To Bitcoin”

Gold is one of the most valuable metals on Earth, with humans finding value in such an element for thousands of years. Over the course of gold’s history, it became a great way for individuals and groups to store value across a variety of settings, countries, and eras. However, with the advent of the internet and the subsequent introduction of Bitcoin, some proponents of digital technologies believe that gold’s time as the primary global store of value might be up.

Bitcoin has long been likened to gold, with many analysts and industry on-lookers alike drawing connections between the inherent nature of the two assets. Some have even called this emerging asset “digital gold,” due to the similarities it shares with the “original” gold.

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Yet, Lou Kerner, a co-founder and partner at CryptoOracle, has come out to vehemently state that Bitcoin actually may one-up gold in certain areas and qualities, while still complementing gold for its importance to human history. Speaking on CNBC’s crypto-focused “The Coin Rush” segment, Kerner stated:

Gold has emerged as the global store of value and it has held that position for literally a couple thousand years — that’s an awesome run. So we now we have something (Bitcoin) that we think may be functionally much much better (than gold). So we expect that over time — not in a day, not in a week, not even in 5 years, — for some of the people using gold as a store of value to switch to Bitcoin.

This statement highlights two interesting points about Bitcoin’s role as a form of “digital gold.” Firstly, that Bitcoin may be inherently better than gold. While the CryptoOracle executive did not mention any specific values/features, it can be assumed that he sees Bitcoin’s ease-of-use, immutability, digital nature, and more as a reason(s) why some would prefer to use it over gold.

Secondly, the fact that the foremost crypto may begin to eat at the market share that gold has carved out for itself over thousands of years. As reported by Ethereum World News, Gabor Gurbacs, the director of digital asset strategy at VanEck/MVIS, claims that Bitcoin could be worth upwards of $20,000 a piece if the asset can succeed as digital gold. Gurbacs explained his prediction, stating:

Investors do refer to Bitcoin as a form of digital gold and gold today has around $7 trillion outstanding. If you take, say, 5 to 10 percent — I’ll let everyone do the math — Bitcoin has upside. Bitcoin is used as digital gold today. It’s a de-risk asset. Basically if someone wants to outlay systematic risk, then one would go to access gold or digital gold.

Back to the aforementioned CryptoOracle co-founder, who closed off his segment on CNBC, comparing Bitcoin to the “so-called” junk bond, as both assets were not accepted upon their arrival. In the case of the junk bond(s), it took 40 years to become a normal tradable asset/contract on the market. As Kerner alludes to, for Bitcoin, it might be much of the same, as it may take years to convince those who are hesitant to change that cryptocurrencies (and blockchain) are the next big thing.
Image Courtesy of Michael Steinberg @ Pexels

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Crypto Market Sees 3% Pullback After A Short-Term Recovery

As Tuesday rolled around, many traders thought that the worst was yet to come for the market, with critics expecting Bitcoin to chip away at the $5,800 support as the week continued. For those who are unaware, the $5,800 level has been continually cited as a strong line of support, with analysts highlighting previous bounces around this price, along with an amassment of technical indicators.

But to the surprise of some, on Tuesday, the crypto market began a slow recovery of its recently-established year-to-date lows.

From $190 Billion To $220 Billion — The Market Recovery

The valuation of all cryptocurrencies recovered from a low of $190 billion to $220 billion within a three-day timespan, with this move restoring faith in an otherwise bearish market. A majority of cryptocurrencies saw strong gains throughout the past three to four days, with Bitcoin taking a cautious move from $5,950 to $6,600 that was backed by consistent volume.

But with this move, altcoins have seen an unexpected resurgence, with Bitcoin dominance taking a three percent dive even as the market continued upwards. As reported by Ethereum World News, cryptocurrencies like Nano (NANO), VeChain (VET), and Populous (PPT) all saw staggering gains of 30% or more, which was quickly attributed to the decreasing Bitcoin dominance figures. Traders saw their portfolios turn green overnight, and a slight sense of FOMO (Fear of Missing Out) return to the minds of optimistic traders.

However, some industry leaders aren’t convinced that the bear market is over yet. Susquehanna’s head of digital assets, Bart Smith, recently claimed that this recovery, albeit relatively strong, could just be a “bear market rally.” This sentiment was doubled-down by Dan Nathan, a CNBC trader and Fast Money panelist, who also agreed with what Smith had to say.

While Arthur Hayes, the CEO of BitMEX, still expects Bitcoin to reach and establish a low of $5,000 before eventually continuing to new all-time highs. Moreover, some analysts expect that this is a “dead cat bounce,” where the price(s) of a publicly-traded asset sees a quick recovery after a downtrend, only to fall further at a later date.

“Too Much Of A Good Thing Is A Bad Thing”

Attesting to this bearish sentiment, on Saturday, traders were reminded of the age-old saying — “too much of a good thing is a bad thing” — as the market experienced a slight pullback after the aforementioned recovery.

At the time of writing, Bitcoin is currently down by 2%, with altcoins posting similar losses. It remains to be seen whether the market will continue to head lower in the near future, but according to the traders on CNBC Fast Money, the technicals on Bitcoin’s chart has begun to show signs of weakness. CNBC analyst David Seaburg stated:

“Look at just the charts, without any other knowledge, it looks like its going lower. The technical set-up right now for Bitcoin does not look promising in my eyes.”

Michał Mancewicz

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Are The Bitcoin Bulls Back? Brian Kelly Weighs In

As reported by Ethereum World News, the cryptocurrency market has been on a surprising tear over the past 24 hours, with a majority of assets posting gains of upwards of 6-7%. At the time of writing, Bitcoin stands at $6,400 after a brief step over the $6,500 line, while a majority of altcoins have seen a return of upwards of 5%. Some altcoins, like Nano, have had an astounding day, with bulls pushing the price of the cryptocurrency up by 25% or more.

Although the cryptocurrency market may have been on thin ice before this recovery, the ice isn’t so thin now, with Bitcoin establishing lines of support at higher lows.

On Wednesday, Bria’s “Fast Money” segment covered this recovery, with Brian Kelly, CNBC’s in-house crypto analyst, doing his best to reason why the market saw such a strong rebound.

Kelly opened up his section calling the market’s price action a “wild ride,” alluding the trials and tribulations the market has faced over the past few weeks. The analyst went on to draw attention to the performance of BTC before, during, and after the expiry of CBoE-based Bitcoin futures. According to statistics which CNBC has attributed to Justin Stanislaw, Bitcoin often does poorly in the days leading up to an expiry date, but sees a 10% move upwards in the week following a futures expiry.

Likening today’s expiry to a similar occurrence, Kelly noted that following the April futures expiry, Bitcoin saw a 20% gain in a mere 6 days. While not explicitly stating it, it’s clear to see that founder of the crypto-centric BKCM fund is expecting for Bitcoin to continue to experience positive bouts price action over the next few days.

To add fuel to the metaphorical bullish flame, Kelly, who has become a near-notorious permabull, added that Bitcoin may be undergoing a short squeeze, as shorts cover their losses in this potential trend reversal.

This sentiment sparked a question from another CNBC panelists, who asked if “these other cryptocurrencies” will bottom out along with Bitcoin. Kelly responded, stating:

They (altcoins) are still quite correlated (with Bitcoin). Over the last 60 days or so, Bitcoin has really been the leader — a lot of that had to do with the speculation about an ETF. But what you did see today is stuff like Ethereum almost 10% off yesterday’s lows, stuff like Stellar Lumens — still holding up quite well. So yes, if you get a 10 or 15 percent run on Bitcoin on a short squeeze, it should bring everything else back up.

So as is normally the case, it is likely that if Bitcoin runs, so will a majority of altcins, albeit with some variance in either the bullish or bearish direction.

However, some had their doubts, including CNBC trader Dan Nathan, who queried Kelly on if the capitulation phase of the market has “petered out.” Turning the question somewhat on its head, the cryptocurrency bull noted that $5,900 may prove to be a level of support if a sell-off continues. Nonetheless, it seems that with this episode of CNBC Fast Money passing by, Kelly remains as bullish as ever.

While some were quick to cast Wednesday’s bout of positive price action aside, calling it a classic bull trap, there are some optimists who are convinced that this might be the beginning of the end of the crypto bears.

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Bitcoin (BTC) Holds $6,000, While Xapo’s President Says Altcoins May Go Extinct

As reported by Ethereum World News previously, the market has been teetering on the edge between freezing waters and thin ice, with the smallest move in the wrong direction potentially dragging the market even further lower. While this market’s outlook may look dismal, all hope is not lost yet, as BTC has held relatively strong above the $5,800 and $6,000 price levels over the past 24 hours.

Bitcoin Holds Steady In The Low $6,000s

As altcoins fell over the weekend, many thought that BTC would follow. But against all the odds, Bitcoin has not just survived this season of altcoin capitulation but thrived in a relative sense, with Bitcoin dominance quickly rising to new year-to-date highs at 54.5%.

Taking a brief gander at CoinMarketCap, it quickly becomes apparent that one cryptocurrency stands out, and as is normally the case, its the asset that has been dubbed “digital gold” by many. Despite the fact that altcoins plunged in value, BTC has held relatively strong, finding a place to stand in the low $6,000s over the past few days.

Although the price of this asset temporarily moved below $6,000, it wasn’t there for long, with it quickly rebounding off a daily low of $5,900 to $6,100 in rapid succession.

As reported by Ethereum World News, Jeff DeGraaf, a well-known Wall Street technical analyst, sees the ~$5,700-$5,800 level as a near ‘life or death’ line of support for BTC, where a move under that level could put Bitcoin into a so-called “game over” phase. DeGraaf elaborated more on what this meant, stating:

“Parabolic moves are notoriously dangerous for short‐sellers … Usually, a top develops that often appears as a descending triangle over months, with reduced volatility and little [fanfare]. Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”

So investors can find the smallest smidges of solace in the fact that BTC has yet to break the heavily contested $5,800 line of support.

Although it has become evident Bitcoin is still a force to be reckoned with even in a bearish market, there are some that are convinced altcoins will not prove to be much of a challenge as prices move lower.

“We Could Be In The Midst Of An Extinction-Level Event For Crypto Assets”

According to Ted Rogers, the president of the cryptocurrency infrastructure firm Xapo, in this market correction, over 90% of all altcoins listed on CoinMarketCap could get wiped out. He added that as altcoins “disappear, (which) might as well happen now,” BTC could prove to be a great buy at this “lower BTC price”.

This sentiment comes via a tweet made on August 13th, in which he wrote:

We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of list will disappear eventually – might as well happen now. Meantime, lower BTC price means incredible opportunity to buy more

It is likely he is alluding to the tough time altcoins have been having, with coins/tokens like ETH, BCH, XLM, XMR, and TRX posting losses of upwards of 10%. Whilst he did not explicitly call out any altcoins to “disappear,” as you scroll through his Twitter feed, it is easily discernable that he is somewhat of a “Bitcoin Maximalist.” As such, this sentiment was deemed unpopular by some, with critics pointing out that this opnion is flawed.

As pointed out by @ThamJason, the destruction of many altcoin projects may not be healthy for the ecosystem, later adding that such a correction would taint the public’s view of this market.

It remains to be seen whether this extinction-level event will occur, but while some may be hard set on predictions, the crypto market’s next move could really be anyone’s guess.

Photo by Anna Popović on Unsplash

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Consumers Have Lost Almost $100 Million To ICO Exit Scams

A common criticism that onlookers have for the cryptocurrency industry is that it is rife with scams and criminal wrongdoings. While this is often an unwarranted blanket classification of this nascent industry, research done by Diar, a weekly fintech-focused publication, claims that there are still some bad actors present in this industry

According to last week’s Diar report, ICO exit scams have raked in approximately $96.8 million in the past two years. While this is a staggering figure in and of itself, it was reported that approximately 70% of these funds were stolen within the past two weeks, with the culprits being four different projects run by two ‘firms’.

The first firm is Shenzhen Puyin Blockchain Group, a shady crypto-centric firm based in China’s Guangdong province, who reportedly ran three scam ICOs — ACChain, BioLifeChain, and PuyinCoin — which raised over $60 million in funds collectively.

As pointed out by eagle-eyed users on Reddit, the office in which the teams of the three aforementioned ICOs were supposed to be in remains empty, clearly indicating that something shady had occurred. Eventually, as news of this scam spread, the State Market Regulatory Administration (SMRA) of China caught wind of these projects and the company behind it.

The second firm was NVO, who raised nearly 3000 Bitcoin to ‘build’ a decentralized exchange and cryptocurrency wallet before disappearing altogether.

While the publication didn’t go into much detail about the other 10 scams listed, there was one that stood out, this being Block Broker. Ironically enough, Block Broker was founded in a bid to “completely eliminate ICO fraud by creating a 100% safe investment environment.”

It all seemed well and good, with ICO review sites like TrackICO, posting a multitude of raving reviews for the project. However, when it was revealed that the likeness of the project’s CEO was nothing but a stolen photo, it became evident that BlockBroker was a scam posing as a scam “eliminator.” Sadly, by the time the expose occurred, it was too late, with the figures behind the project running away with $3 million.

As the publication notes, the use of “fake profile pictures” is a common practice with exit scam projects, along with the plagiarism of promotional materials and whitepapers, which should be focused on showing a token or project’s worth instead of the malicious action of copy and pasting.

Although these projects — or scams more accurately — are clearly in the wrong, the aforementioned report notes how the incentives around an ICO offering are inherently flawed, writing:

“Unsurprisingly, the blatant exit scams continue to plague the largely unregulated ICO sector where the founders have no contractual obligation to deliver a product. After raising millions of dollars with no string attached, the founders’ incentives to actually build a valuable company are very limited.”

While this is a powerful statement by itself, as it clearly highlights the issue with the ICO crowdfunding structure, to add insult to injury, the report drew attention to yet another issue in the following statement:

“Even if the founders were to build a valuable venture, it’s unclear at best whether the price of the utility token would reflect the success of the company.”

This statement brings a much more fundamental issue to light, where cryptocurrency projects can be often overvalued, as investors seek to make

Despite the theory that scams are likely a minority in the ICO pool, as Ethereum World News has reported, many projects which are operated in good faith fail to meet promises touted in their whitepapers, including claims of decentralization.

While this issue may be starting to subside, with the development of blockchain technology pushing forward at a relentless pace, the aforementioned problems with the ICO structure still prove to be a problem in today’s cryptosphere.

Photo by Fancycrave on Unsplash

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A Thin Ice Market — Altcoins Bleed Out

On Monday morning, the cryptocurrency market awoke to a horrific sight, with the market reestablishing new year-to-date lows amidst an altcoin ‘cliff dive’.

Bitcoin May Have Sprained Its ‘Ankle’, But Altcoins Have Broken Some ‘Bones’

The cryptocurrency market remains on thin ice, as Bitcoin teeters above the ever so important level of support at $5,800, while altcoins threaten to drag the price of BTC down with them. At the time of writing, Bitcoin is down 1% on the day, falling to $6,250, which is only a small step down from the $6,400 level that was established during Saturday afternoon.

As reported by Ethereum World News, Jeff DeGraaf, a well-known Wall Street technical analyst, sees the ~$5,700-$5,800 level as a near ‘life or death’ line of support, where a move under that level could put the cryptocurrency market into a “game over” phase. DeGraaf elaborated, stating:

“Parabolic moves are notoriously dangerous for short‐sellers … Usually, a top develops that often appears as a descending triangle over months, with reduced volatility and little [fanfare]. Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”

So the fact that Bitcoin has not broken through the $5,800 line of support can be a silver lining in a stormy market.

Although Bitcoin has remained relatively strong in the face of tribulations, altcoins have begun to suffer, metaphorically breaking some ‘bones’ on their way to new year-to-date lows. A majority of altcoins are currently posting losses of 5%, while some altcoins have had it even worst off if you can believe it.

Today’s bout of altcoin sell-side has led Bitcoin’s market dominance to rise to a staggering 52.5%, which is the highest it has been since December’s crypto boom as ‘digital gold’ briefly hit the price of $20,000 a piece.

Ethereum Falls Below $300 For The First Time Since November 2017 

In this move downwards, one player stands out from the rest. Sadly, instead of positively standing out from the ‘altcoin crowd’, this is a case of Ethereum sticking out like a sore thumb. Ethereum unarguably had it the worse today, as it became the only top 10 crypto asset to fall by over 10% at an earlier point today.

As it stands, the price of ETH has just moved below $300, which is the first time it has been at this level since November 2017.

Over the past week, Ethereum has fallen by over 28%, while Bitcoin has ‘only’ posted a loss of 10%. With this devastating move downwards has led some to ask, “Why is the price of Ethereum doing so poorly in comparison to other altcoins?”

As reported by Bloomberg, this specific capitulation event with Ethereum has been widely attributed to a large sell-off with ETH funds raised by ICO projects. Biswa Das, who works at crypto hedge fund BloomWater Capital, commented on this occurrence, stating that the market is too fragile to take an ICO sell-off in the following statement:

“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the market is so fragile that it causes a lot of pressure.”

While Ethereum has already been pressed down for months with this factor, Spencer Bogart of Blockchain Capital says it may be far from over, as there are still hundreds of thousands, if not millions of ETH that are still being prepped to be sold en-masse on open order book exchanges.

Nonetheless, it remains to be seen whether a drastic Ethereum downtrend will drag down the rest of market into icy cold waters, which may be ready to nip at the feet of cryptocurrency investors.

Photo by Erica Nilsson on Unsplash

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