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Bitcoin Fundamentals Boom Amid Crypto Winter: Why Hasn’t BTC Caught Up?

Bitcoin Fundamentals Still Better Than Ever

It isn’t a secret that the fundamentals of the cryptocurrency space are looking rather hot. Spencer Bogart of Blockchain Capital told Bloomberg TV that this nascent space is still rife with innovation, talent, and capital. The prominent crypto investor explained that the levels of entrepreneurial talent and institutional interest hasn’t ceded with the Bitcoin price, leading him to determine that this ecosystem is far from dead in the water.

He even remarked that from a macro point of view, with rising debt levels, copious quantitative easing, globalism concerns, among other issues, BTC could be the “most compelling asset in the world right now.”

Dan Held, the co-founder of Interchange and a former product manager at Blockchain.com, has also expressed optimism, noting that he’s more bullish on Bitcoin than ever before.

He laid out six points to back his comment on Twitter: Starbucks’ public valuation is higher than BTC, less than 0.1% of the world’s population is involved in Bitcoin, the halvening is under 450 days away, a crypto-backed exchange-traded fund (ETF) could arrive by late-2020, government debt swells, and the “institutional plumbing is being built.” Held’s remarks come after prominent trader The Crypto Dog released a similar list of things to be bullish about just days ago.

While all these developments have continued to bless the industry, prices have seemingly failed to react. In fact, since the lows established in mid-December, the aggregate value of all cryptocurrencies has only moved from $102 billion to $135 billion. Although a 30% gain within three months is impressive in any other market, investors have deemed this performance lackluster at best.

Market Continues To Trade Flat

The team at Pantera Capital put this underlying market theme best in a recent letter. Per previous reports from Ethereum World News, the blockchain-centric venture group stated:

We have been surprised to see how far prices have deviated from the underlying fundamentals — which are stronger now than ever.

But why are prices barely moving, in spite of the news?

Well, the answer may be quite simple. Many have looked to the “Wall Street Cheat Sheet — Psychology of a Market Cycle” for an answer. The chart dictates that following capitulation, recently exemplified when Crypto Yoda left the space, markets enter a stage of anger, desperation/depression, and then disbelief.

Pundits claim that we are in the later phase, as many are sure that lower lows are inbound, and that the development of the crypto industry in recent weeks is just white noise, so to speak. The Crypto Dog, a prominent Bitcoin trader, touched on this himself recently, noting that while sentiment is more bullish than bearish, a fleeting feeling of an impending collapse still sits at the back of his mind  — a likely sign of a market phase of “disbelief.”

Title Image Courtesy of Patrick Tomasso Via Unsplash

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Buy Bitcoin (BTC), But Diversify Into Crypto Assets Too: Pantera Capital Partner

“Now’s A Great Time To Invest Into Bitcoin (BTC)”

As the year comes to a head, a number of crypto traders and investors have sought to figure out what lies in wait for Bitcoin (BTC) in 2019. Paul Veradittakit, a partner at the San Francisco-based Pantera Capital, has told CoinTelegraph that now’s an optimal time to buy into Bitcoin (BTC).

In a recent Youtube interview with CoinTelegraph, Veradittakit, a prominent venture capitalist and advisor to Blockfolio and Icon, has claimed that from a short to medium-term outlook, it would be logical to invest in BTC at current prices. The Pantera partner isn’t the only industry insider to tout such sentiment, as a number of crypto traders have claimed that in the years to come, traders will be kicking themselves for not buying BTC at $4,000.

Veradittakit, touching on the state of the cryptosphere, noted that altcoins at large remain strongly correlated to Bitcoin (save for Ethereum and XRP). Regardless, the long-time crypto entrepreneur noted that with markets low, today is still a “great time to be buying cryptocurrencies,” adding that diversification into this dynamic industry would be advantageous. He added:

“Putting all your eggs in one basket is probably not a good strategy. So either investing into an index, or investing into a bunch of them [altcoins] that you’re really passionate about, or even going to a fund manager [to run your holdings is logical].”

The Pantera partner’s statements come hot on the heels of a recent report from Ethereum World News regarding Tone Vays’ thoughts on the same subject matter. As reported by us previously, Vays told CoinTelegraph that 2018’s bear market is “significantly different than what happened back in 2014 or 2015.” More specifically, the trader, formerly of J.P. Morgan, noted that this time around, when BTC surges, the “altcoin bubble will not return.”

Vays hinted at the fact that the industry has already preemptively indicated that altcoins won’t return, as made apparent by the Bitcoin Cash debacle (he called it an “implosion”), and other smaller events that accentuated the irrelevancy of these alternative coins.

Jimmy Song, a leading Bitcoin educator and developer, echoed his peer’s points, stating that many “crappy projects (altcoins)” are likely in their death throes, and will be eventually purged from this nascent ecosystem. Song, touching on why this is significant, explained that there has been a “lot of malinvestment in this space,” making the removal of fraudulent projects positive for bonafide coins.

Yet, while there are contrasting views on this topic, both sides do have their biases. Vays and Song, by no fault of their own, entered the industry when there was only Bitcoin (essentially), and have built their investment theses around the flagship cryptocurrency. And while Pantera’s founder forayed into cryptos early, the fund actively invests in altcoin-centric platforms, products, and services, like Abra, Brave, Civic, Ripple, and ZCash to name a few.

2019 Will Be A Great Year

Veradittakit went on to touch on what’s next for the cryptosphere in 2019. The Pantera insider first noted that Bakkt’s launch, which was recently rumored to have been delayed, will be an integral part of the narrative moving forward. he explained that if the crypto market is to return in full-swing, institutions will need to have a viable way to foray into this industry. Bakkt is, of course, a viable fiat on-ramp backed by the Intercontinental Exchange, Starbucks, and Microsoft.

The investor noted that he expects 2019 to beckon in scalability projects, like the Lightning Network and other smaller efforts. But interestingly, Veradittakit explained that he doesn’t expect any of these ventures to be able to compete with Ethereum. Along with a push for scalability, the prominent crypto advisor also noted that he expects for significant institutions to acquire and invest capital into startups, especially as talent continues to flock to this industry.

Title Image Courtesy of Bruno Van Der Kraan via Unsplash

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ICOs Could be Forced to Pay Back Millions Following SEC Ruling

Cryptocurrency, Initial Coin Offerings (ICOs)–While the crypto markets hit a relative low for the year, with Bitcoin now trading at $3300, the news continues to worsen for the controversial field of initial coin offerings.

ICOs, the innovative fundraising measure that has capitalized on the speed of growth in the space of cryptocurrency, have come under fire by the United States Securities and Exchange Commission over whether they should constitute securities. In November, the Commission announced a landmark ruling which could have broad implications for the landscape of the industry, when it determined that two startups companies were in violation of securities laws. Two projects in question, including Paragon, had managed to raise millions by issuing tokens to non-accredited investors, a breach in which the SEC found grounds for legal action.

Paragon has since announced that it would be forced to pay back investors, leading to a sense of uneasiness among other coin projects which could be facing a similar fate. Crypto hedge funds, which made substantial returns on investment by buying into initial coin offering projects during the bull run of 2017, could be looking at a possible scenario where invested projects are forced to pay back investors en masse, leading to a conundrum for the funds which backed their development.

As reported by Bloomberg, the situation surrounding ICOs is further complicated by the fact that many cryptocurrency projects failed to register with the SEC in addition to selling their tokens to individual investors who lacked the proper requirements for accreditation. While some have hailed the ICO, token-issuing model as one of the more innovative processes to emerge from the development cryptocurrency, others have seen a budding industry ripe with corruption. ICOs allow startup companies to fund and issue projects to investors at a rapid pace compared to the traditional route, including the ability to sell directly to Main Street investors rather than going through venture capitalists.

However, with the SEC ruling potentially being applied to a broader spectrum of currencies than the original two announced in November, hedge funds which supported ICO projects throughout 2017 and 2018 could be left holding the bill in the event of investor funds being returned. Pantera Capital Management, a fund heavily invested in cryptocurrency, is one company in particular that is reporting a shaky outlook following the SEC ruling.

In a newsletter released on December 13, Pantera’s co-chief investment officers Dan Morehead and Joey Krug explained that the SEC had broad implications for both their fund and the ICO marketplace, with one possible outcome being a stifling of innovation,

“While we believe the vast majority of the projects in our portfolio should not be affected, approximately 25 percent of our fund’s capital is invested in projects with liquid tokens that sold to U.S. investors without using regulation D or regulation S. If any of these projects are deemed to be securities, the SEC’s position could adversely affect them. Of these projects, about a third (approximately 10 percent of the portfolio) are live and functional and, while they could technically continue without further development, ending development would hinder their progress.”

While most regulatory bodies have been careful to tread lightly around emerging industries, with cryptocurrency being a possible source of innovation for the broader financial and tech landscape, ICOs have continued to be a source of contention for the SEC.

The post ICOs Could be Forced to Pay Back Millions Following SEC Ruling appeared first on Ethereum World News.

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Crypto Fund Pantera Capital Is Seeking $175 Million For Its Next Venture

As reported by Ethereum World News previously, Pantera Capital has been an integral part of this flowering industry for over five years. Along with recently reaching a five-year milestone, the industry veteran has also posted a lifetime return of 10,000 percent (100x) on its foremost fund, an astounding feat to say the least.

It seems that with a recent announcement, which has been relayed by TechCrunch, that Pantera is looking to continue to achieve astonishing ROIs (return-on-investment) with a recent move to open its third venture fund.

Pantera made its debut in the nascent crypto and blockchain industry in 2013, raising $13 million for its first fund. Later, the San Francisco-based firm raised nearly double the previous amount for its second venture fund. While those funds succeeded as aforementioned, posting staggering returns through investments into early-stage crypto tokens and blockchain-centric projects, Pantera’s aspirations have not been quenched. So most recently, the investment company is seeking upwards of $175 million for its third venture fund, an increase of over seven-fold from the second investment round.

Paul Veradittakit, a partner at the firm, gave a statement on the ambitious target amount, noting:

“[The target amount is a] function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds. With more interesting later-stage investments [on our radar], too, we want to be flexible and able to move with the market.”

According to a document recently filed to the SEC, Pantera has already made a substantial amount of progress, garnering over $71 million in capital allocation from 90 individual investors or investment groups. Veradittakit notes that this new investment vehicle will be a so-called “evergreen fund,” where it will be structured to have an “indefinite” lifespan that lets investors come and go as they choose.

Previous venture investments include early-stage allocations into BitStamp, Xapo, Ripple, and Circle, which have quickly grown to become foremost players in the crypto asset industry.  So it goes without saying that Pantera’s venture investments span this multi-faceted industry and are rather successful as well. As Veradittakit puts it:

“Pantera has invested in lots of wallets and exchanges focused around the world, in Coinbases of different geographies, in enterprise-related blockchain companies. More recently, we’ve funded everything from big data to decentralized application platforms.”

Pantera’s Three Primary Investment Strategies

Many are hopeful that this new fund will succeed, with the firm utilizing venture strategies, along with three following investment strategies that have helped it excel in this nascent industry.

Firstly, Pantera has a fund that exclusively invests in initial coin offerings (ICOs) that look promising to the firm’s assessment and analysis team. As CEO Dan Morehead elaborated, this specific fund buys pre-sale ICOs, which are often early-stage investments when the risk/return ratio is at its peak.

Morehead added the fund does not only invest into ICOs but also provides “the right connections,” creating a symbiotic partnership to benefit both parties.

Secondly, Pantera has a Bitcoin-centric vehicle that has been likened to a hedge fund, with this being the firm’s flagship fund. As aforementioned, the fund has obtained a staggering 10,136% return “net of fees and expenses” on the original investment.

Last but not least, the American company’s last fund invests in established cryptocurrencies via exchanges. Utilizing a machine learning algorithm, the fund can automatically invest in cryptocurrencies, while also fitting its investments to the needs of Pantera’s executive team.

It is unclear in what direction the fund will head, but as the aforementioned firm partner notes, this industry is still in its infancy and there is still a lot of opportunity for growth.

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Blockchain for Music Startup Raises $5.5. Million in New Funding

Decentralized music-sharing protocol Audius has raised $5.5 million in a Series A funding round led by General Catalyst and Lightspeed Capital the firm announced Wednesday.

The project seeks to use a blockchain platform to help artists control the music they share, according to a press release.

While a release date is not yet clear, the musician-owned platform would allow artists to publish their work and interact with fans, rather as platforms like SoundCloud operate today. However, Audius would provide artists with a greater degree of control over their intellectual property than existing systems do today, the release claims.

The startup boasts advisers including BitTorrent chief architect Greg Hazel, Augur co-founder Jeremy Gardner and musician 3LAU, among others.

3LAU, who is notably headlining what’s been dubbed a blockchain music festival later this year, said in a statement that it is important for artists to be a part of running their content distributors.

He said:

“Artists need decentralized models for music sharing, and a stake in the platforms they contribute content to. Blockchain allows Audius to do this with tokens and decentralized voting-based governance so artists have a say in how the platform evolves. It’s a very elegant model and one which, as an artist, I find immensely attractive.”

The platform was conceived by musician Ranidu Lankage and co-founders Roneil Rumber and Forrest Browning, according to the release. Also participating in the investment round were Kleiner Perkins, 122West, Ascolta Ventures and Pantera Capital.

Headphones and keyboard 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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10,000%: Pantera Reports Massive 5-Year Crypto Investment Return

Cryptocurrency investment firm Pantera Capital reported a more than 10,000 percent lifetime return on Friday, coming five years after its formation.

In an email, co-chief investment officers Dan Morehead (who is also CEO) and Joey Krug shared the figure as they celebrated the fund’s fifth anniversary. Perhaps unsurprisingly, they’re still bullish about bitcoin, particularly in the years since Pantera’s launch.

To that end, Morehead and Krug included two emails that the fund sent out in 2013 to illustrate that point.

“We wanted to share the original logic – as it is equally compelling today,” Morehead and Krug wrote. At the time, an email sent by Morehead predicted that bitcoin – which was trading at $104 at the time – would see $5,000 because “bitcoin dominates cash, electronic fiat money, gold, bearer bonds, large stone discs, etc. It can do all of the things that each of those can. It’s the first global currency since gold. It’s the first borderless payment system ever.”

Three months later, bitcoin was trading at $253 when Morehead again touted the principles behind the cryptocurrency.

Morehead wrote at the time:

“In my opinion, it’s like deciding whether to buy Microsoft back in the day at $0.20 a share. It was hard to do when the stock was just at $0.10. In the fullness of time…clearly a great trade. I believe bitcoin right now is just like that. The world’s first global currency since gold and the world’s only borderless payments system (frictionless to boot) at a market cap of $3bn? Now that Silk Road is gone, a new wave of sophisticated investors are entering.”

Pantera, which has since launched its own hedge fund to invest in blockchain startups, plans to travel “over the next months to discuss Venture Fund III and the blockchain disruption.”

“We have organized group lunches in many cities, should you want to meet other investors who share your interest in blockchain,” the officers wrote.

Some of the firm’s recent investments include sharing economy startup Origin and “stablecoin” startup Basis.

Bitcoins 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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Stablecoin to HODL? Pizza CEO Nets Millions for Crypto

A fixed price coin whose value increases over time? Only in crypto.

Coming out of stealth mode Monday, crypto project Fragments is revealing that it has raised a $3 million venture round led by True Ventures, with additional participation by Pantera, FBG Capital, Founder Collective and Coinbase CEO Brian Armstrong.

Co-founded by Pythagoras Pizza founder Evan Kuo, the project was originally designed as a gig economy token but has since pivoted from that vision to one that addresses a fundamental problem in crypto: the need for a token that can easily trade in and out of government-backed currencies.

The big idea behind the project, as described in its documentation, is this: “At a high level, the Fragments protocol stabilizes price by moving volatility from unit price to unit count.”

But while that may sound complex, the idea is simple at heart.

When the price goes up, the protocol will automatically issue a new cryptocurrency called “fragments.” Some of those fragments will go to the wallets of existing users. So, a holder who bought one token and never sold would find more tokens in the wallet over time, even if they never made later purchases.

It’s worth noting that emissions won’t go solely to wallet holders, though. They will also go into two reserves, one that funds future development and another that buys ether, ethereum’s blockchain token, to have ready when supply needs to contract because prices are falling.

It’s natural to think that inflation and deflation tend to occur in equal measure, but Kuo noted that there’s no theoretical limit to how much a currency can be worth, but the value can’t go below zero.

And every time deflation gets triggered, holders come out ahead.

Venture interest

And because of this built-in incentive scheme, investors see the idea as one that could last.

Kuo explained that Fragments wanted a venture fund to lead its round in order to signal that the project is oriented around long-term thinking.

He told CoinDesk:

“In the crypto world, things tend to move faster. With a venture fund, they are really looking to be involved in a project for five to 10 years, ideally”

True Ventures partner Adam D’Augelli also spoke to this long-term vision, telling CoinDesk that he believes the project will open up new business opportunities in crypto over time.

“Evan brings a unique perspective to this problem, which is to be fair to all participants in the market and focus on long-term usability,” D’Augelli said.

It’s worth noting here that Kuo resists the stablecoin category, preferring to describe fragments as a “low-volatility cryptocurrency,” but it’s hard to imagine the market won’t think of it alongside the other similar efforts, such as Tether, MakerDao and Basecoin.

“Not that this won’t be stable, but more that it is a holdable token as well as a spendable token,” Kuo said.

Pantera partner Paul Veradittakit told CoinDesk in an email that the firm likes the approach of “utilizing a reserve to help stabilization. The stablecoin segment is going to evolve quite a bit but this team should be able to navigate the waters well.”

Complementing crypto

It’s worth noting that Kuo came around to the idea after he first considered building the aforementioned project for the gig economy. So, like many entrepreneurs before him, he pivoted to solving the first problem in front of him and held off on his original idea.

But to be able to work at scale, the company will need enough clout to register in the crypto economy. That will take capital if, for nothing else, stocking its reserve. (Kuo declined to say how much he thinks Fragments will need or how it would be raised in any token sale.)

“I don’t see us raising an enormous amount,” Kuo said.

The most he would say is that it should be about six months until the project runs a testnet. “Since we’re not going to be launching a token in advance … it’s just all about getting it functional,” Kuo said.

The first token will be a U.S. dollar-pegged fragment, which doesn’t necessarily mean that future coins will be pegged to other fiat currencies.

Kuo concluded:

“Ideally, we’d like to be a stabilization service for utility tokens, because I think that would be the ultimate stablecoin.”

Wooden puzzle 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.

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.