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Crypto Startups Going Bankrupt Amidst Market Crash

Blockchain, Cryptocurrency–While investors are left holding the tab from the plummeting crypto market, with this week seeing a relative low for Bitcoin since peaking at $20,000 in December 2017, crypto-based startups have also had to contend with the fallout.

On December 6, Bloomberg reported on a round-up of cryptocurrency startups that are closing doors amidst the most recent price rout for Bitcoin and the broader altcoin market, starting with ETCDEV–the group behind the launch of Ethereum Classic.

ETC, seventeenth in market capitalization with a value of over $400 million, announced last week that it would be closing shop following a shortage of funds and inability to raise more capital to keep the project afloat. Igor Artamonov, founder of ETCDEV and the forked coin of Ethereum (ETH), spoke in an interview on the state of his company in the context of the broader falling market,

“There are a few things that happened at the same time. I am sure if that happened a year ago, that wouldn’t be a problem at all, a year ago there was a lot of free money in the market. But in a bear market there’s a change.”

ETCDEV is not the only crypto based company to take a hit in the present market, with the Bloomberg report including actions by ConsenSys, a software company based out of New York, to cut its workforce by 13 percent as a direct result of falling coin prices. In November, content publishing platform Steemit Inc., which also created the currency Steem (STEEM) to facilitate in-house transactions, had to layoff 70 percent of its employees.

Bloomberg lays the majority of the blame in projects over-extending themselves on digital assets, setting up significant losses as a result of 2018’s ongoing bear cycle,

“Many of the companies are suffering because they kept a portion of their funds in digital assets, whether in tokens they sold through initial coin offerings or in Bitcoin and Ether, which served as the preferred means of exchange in the crypto world. As prices collapsed this year by more than 90 percent in some cases, and their so-called digital wallets thinned out, many developers found they couldn’t raise additional funding.”

With the decline in crypto prices and the demand for ICOs, many projects that made their fortune collecting coins in exchange for issued tokens have had to contend with the ill effects of a collapsing market. In addition, the landscape for fundraising has vastly shifted, with projects no longer being able to raise millions on a whitepaper alone or by including “blockchain” in a company title.

In some ways, the declining market may have the effect of pushing better projects to the top of the heap, with efficiency being valued over greed. Given the sudden boom cryptocurrency experienced in 2017, with coin prices rising several thousand percent for many currencies by year’s end, the gold rush for blockchain and ICOs created a scramble that is still having negative effects on the industry. The focus became on launching projects rather than promoting durability, quality and real world use–a hallmark of an inflated and destined to crash industry.

With prices and the market resetting to a valuation to that of over a year ago, cryptocurrency will find itself of having to do more with less, which includes focusing on development routes that will lead to the greatest adoption by Main Street customers while drawing the interest of Wall Street investors.

The post Crypto Startups Going Bankrupt Amidst Market Crash appeared first on Ethereum World News.

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Breaking: Winklevoss Bitcoin ETF Gets Rejected Yet Again

It was just announced that the most recent proposal for a Bitcoin ETF from the Winklevoss Twins, the owners and founders of the fittingly named Gemini exchange, was just rejected by the SEC.

Old News Rehashed, Or Something Entirely New?

At first glance, many saw this as another bout of old news that was reposted by mainstream media. Charlie Shrem, a legend in cryptocurrency circles, took to Twitter to write:

This is old news, While I think Cameron and Tyler would have run one of the better ETF’s, The new ETF excitement came from the fact that CBOE filed their own Bitcoin ETF. The SEC would rather grant an ETF to an existing institution over a new one.

However, according to the news broken by CNBC just one hour ago, the SEC has now rejected the permitted revision of the ETF proposal, that was originally rejected in 2017. According to the regulatory body’s new statements, there were issues with fraud and investor protection in the revised proposal, resulting in a denial from the SEC. Additionally, the SEC noted that there were high levels of manipulation in cryptocurrency markets, which are conducted primarily by “unregulated” markets that exist overseas, away from the prying eyes of U.S. regulators.

The vote for the Winklevoss-backed ETF was reportedly three against, and one for the ETF, not most welcome showing cryptocurrency proponents looking in on this decision.

Cryptocurrency Prices Immediately Drop Following The Announcement 

As a result of this announcement, the market immediately took a dive, with Bitcoin seeing a rapid $300 drop to the ~$8,000 price level. Altcoins followed close behind Bitcoin, posting similar percentage losses in comparison with the foremost cryptocurrency.

It is currently unclear how this ruling will affect the upcoming verdict with the CBOE-backed ETF, but many are still hoping for the best, as it was made clear that the verdict regarding the VanEck/CBOE proposal is still in the works.

Many see a Bitcoin ETF as the key to widespread adoption, and as BitMEX’s CEO puts it, $50,000 by the end of the year, so it would be advantageous for an ETF proposal to eventually garner approval from regulatory bodies.

This is a breaking news story, so Ethereum World News will be sure to keep you updated as this situation develops further.

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CNBC Fast Money Speaks On Bitcoin Run-Up And Stellar’s Astonishing Week

On Friday, CNBC’s “Fast Money” show has continued its coverage of the cryptocurrency market, recapping the past week’s crypto price action, namely the Bitcoin and Stellar run-ups.

“Currency War” Could Push Cryptos Higher

The past seven days have been generally bullish for the cryptocurrency market, with Bitcoin seeing an over 15% move to the upside, with many altcoins following closely behind. Despite staying relatively stagnant over the past 2 to 3 days, with Bitcoin holding and altcoins taking a slight hit, some cryptocurrency analysts think that this is a bullish sign.

Despite not physically being present, Brian Kelly, CNBC’s in-house crypto expert and CEO of the blockchain-centric BKCM investment firm, issued a message to the Fast Money hosts regarding this week’s price action.

Holding a bullish tone, Kelly wrote:

The character of the market appears to have changed. For most of this year, every rally was met with aggressive selling, that has changed over the last 2 weeks.

Essentially, Kellly believes that if Bitcoin can hold key resistance levels for extended periods of time after a run-up, it is a bullish sign. Kelly also went on to explain that a potential for a “currency war” could be a “tailwind” for Bitcoin moving forward.

For those who are unaware, the U.S. President Donald Trump recently made a series of orders that put trade restrictions on a variety of U.S. trading partners, making some believe a “currency war” is inbound, resulting in a higher level of financial imbalance between nations.

This financial instability and uncertainty could spark a growing need for a financial safe haven for investors in the near future, with Bitcoin filling that need perfectly as “digital gold“.

Brian Kelly Speaks On The Stellar (XLM) Project 

As reported by Ethereum World News previously, the past week saw XLM take off, easily outperforming a majority of altcoin projects, rising from 20 cents to 30 cents within a week. This enormous price move was attributed to an influx of positive news regarding the project, namely IBM’s use of a Stellar-based stablecoin and the potential addition of XLM to Coinbase.

As a result of this bullish price action, Stellar’s collective market cap surpassed Litecoin’s, with the former becoming the 6th largest cryptocurrency in the entire industry. Kelly also expressed his thoughts about Stellar’s run-up in the aforementioned message, writing:

Stellar is both a currency and a platform, so it makes sense that it is more valuable than Litecoin. The partnership with IBM is very interesting and could add even more value as they build more products on the Stellar platform.

Another host on the Fast Money panel doubled-down on Kelly’s apparent bullish sentiment regarding XLM, stating that there could be a “capital flight” from XRP to Stellar in the near future, citing the reason of Stellar’s use case as a viable transactional tool.

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