Tether untethered

what the fuck is going on with bitcoin

Four days ago the crypto markets were crashing hard. Coinbase , that bastion of crypto stability, is currently sporting a series of charts that look like Aspen black-diamond ski runs.

What is happening? Ultimately, sentiment is bleak in the crypto world, with bull runs being seen as a thing of a distant past. As regulators clamp down, pie-in-the-sky ideas crash and shady dealers take their shady dealings elsewhere, the things that made cryptocurrencies so much fun — and so dangerous — are slowly draining away.

November was supposed to be a good month for crypto. Garbage sites like FortuneJack were crowing about bitcoin stability while the old crypto hands were optimistic and pessimistic at the same time. Erik Voorhees, founder of ShapeShift, felt that the inevitable collapse of the global financial system is good for folks with at least a few BTC in their wallets. Others, like the Binance CEO Changpeng Zhao , are expecting a bull run next year and said his company was particularly profitable.

Ultimately, crypto hype moves the market far more than it has any right to, and this is a huge problem. So who do you believe, these guys or your own lying eyes? First, understand that crypto is a technical product weaponized by cash. These are startups that can literally affect their own value over time. Tether has long been the prime suspect in the Bitcoin run up and crash. What are those whiffs of misconduct to which I previously referred?

I mean. How much time do you have? The two entities have allegedly been subpoenaed by US regulators. In possibly but also possibly not — again, a fog of mystery related news, the US Justice Department has opened a criminal investigation into cryptocurrency price manipulation, which critics say is ongoing.

Comparisons are also being drawn with Liberty Reserve, the digital currency service shut down for money laundering five years ago:. So what the hell is going on? Good question. On the one hand, people and even companies are innocent until proven guilty, and the opacity of cryptocurrency companies is at least morally consistent with the industry as a whole. But on the other … yes, one reason for privacy maximalism is because you fear rubber-hose decryption of your keys, but another, especially when anti-government sentiment is involved, is because you fear the taxman, or the regulator.

A third might be that you fear what the invisible hand would do to cryptocurrency prices, if it had full leeway. Now Bloomberg is reporting that the U. Justice Department is looking into Bitfinex for manipulating the price of Bitcoin. This alone could point to the primary reason Bitcoin and crypto are currently in free fall: without artificial controls, the real price of the commodity becomes clear.

As we learned last week, the SEC is sick of fake utility tokens. While the going was great for ICOs over the past few years with multiple companies raising millions if not billions in a few minutes, these salad days are probably over. However, this also means that those same companies can be more serious about products and production rather than simply fundraising. SEC intervention dampens hype, and in a market that thrives on hype, this is a bad thing.

One other interesting data point involves Bitmain. Bitmain makes cryptocurrency mining gear and most recently planned a massive IPO that was supposed to be the biggest in history. Instead, the company put these plans on hold. Interestingly, Bitmain currently folds the cryptocurrency it mines back into the company, creating a false scarcity. The plan, however, was for Bitmain to begin releasing the Bitcoin it mined into the general population, thereby changing the price drastically.

According to an investor I spoke with this summer, the Bitmain IPO would have been a massive driver of Bitcoin success.

Now it is on ice. And, as we all know, crypto is all about risk. Ultimately, crypto and the attendant technologies have created an industry.

That this industry is connected directly to stores of value, either real or imagined, has enervated it to a degree unprecedented in tech.

He — and the entire open-source industry — made billions of dollars over the past 27 years. The same should be true of crypto, but the cash is clouding the issue. Instead, of primary concern is whether the technology is progressing. The bag holder theory November was supposed to be a good month for crypto.

what the fuck is going on with bitcoin

Forget the Dow's big rally or booming tech stocks, there's a much wilder investment story happening.

Bitcoin BTC has a finite supply. There will only ever be 21 million Bitcoin in existence. This is represented by the growth of the blue bands in the top right corner of the chart. Regardless, click shows that the liquid supply amount of coins available to be spent of BTC is shrinking, while the total supply amount of coins in existence grows. In approximately days, the Bitcoin mining reward will be cut in half. Bitcoin is minted when a miner or group of miners finish validating a block of transactions think of a block of transactions like one page in a financial ledger. Miners are like blockchain accountants, they set their computers to validate the transactions occurring on the Bitcoin ledger, and whenever they mine a new block they are paid

It was a rough year for bitcoin–and cryptocurrencies in general. Here’s a look at how we got here.

For the latest business news and markets data, please visit CNN Business. So how does the virtual digital currency work -- and what's behind its meteoric rise? Many of its backers saw it as a simple global payment system for anyone to use. Unlike the U. Instead, they are "mined" by computers using complex algorithms. Payments in bitcoin can be made without traditional middlemen such as banks and without the need to give your name. That made bitcoin popular with criminals and others who wanted to move money anonymously. But its price has taken off this year as mainstream investors have become interested. Some experts say the biggest force pushing bitcoin prices higher this year has been

what the fuck is going on with bitcoin

This Internet Thing will Never Work Out

In recent weeks we have seen the crypto economy, it seems, move only sideways with little sign of pumping close to the levels we saw at the very beginning of For me, the reasons for this movement is clear maybe because we are working at the coal face and dealing with BTC every day. There are other forces are at work here, each placing very different external pressures on Bitcoin and the broader crypto economy.

Before going into this just a few comments on ICOs. Look, the heady days of the second half of when ICOs exploded are unlikely to ever return. The simple reason, the crowd is not sitting on profits to burn investing in a range of ICOs at a whim. Many newbies also came into the market, lost their cash and left. Thus far inwe have seen capital flowing into ICOs shift from the crowd to institutional monies where many ICOs now get full or partial funding privately, before the crowd is invited.

And of course, the regulatory landscape where some jurisdictions are clarifying their position SEC for example is also not helping. In real terms this means an increasing number of ICOs are competing for a smaller piece of the pie, and where competition to get investment is very intense and to a degree desperate.

ICO activity is increasing and the search for capital much harder to find, against a background where all tokens are now being considered securities anyway, anyone buying a token will have to pass some form of KYC and AML which is also pushing the crowd away. So now is not a great time to launch your ICO unless you are really special and you are prepared to go on the road and find investors yourself or with the help of firms like. With value moving sideways we need Fiat currency to come into the crypto economy, and to attract this capital you will need to package your proposition differently when pitching your idea to investors.

An Information Memorandum and pitch deck supported by some real numbers and projections. And if you want to sell a security token to the crowd you can!

A Prospectus will get you started and adds credibility to your goal. The simple explanation is that Bitcoin has never been better, more sought after and in demand. The change is the explosion of OTC Over The Counter where, rather than just a dozen OTC traders and brokers, we now seeing thousands globally emerge all chasing the big Buy Sell in search of the big pay-out.

This in itself is not so bad, but here is the thing: very few deals actually complete and strangely the US banks that hate crypto so much, apart from buying through the back door as the ones providing escrow and custody services?

The recent patterns are BTC rises at the start of the month and then falls at the end as market makers who have shorted BTC clear their positions creating unnecessary and additional short-term volatility.

Because they. These bankers only see BTC as just another financial product to short to make money on without adding any value to the ecosystem whatsoever, because they know there are still BTC holders that are easily spooked and will sell and take their losses which is their gains. In our business, we have been involved in OTC trades for several months and have on our books a range of Buyers and Sellers, from Mining Pools who What the fuck is going on with bitcoin clean coins at a premium, to High Net Worth individuals and Institutions who are keen to Buy.

We have also had our own deals presented back to us by the layers of traders, brokers and intermediaries that read more strangling deals to get a piece of the commissions. All believing they are going to get rich quick on the back of aBTC deal. Whilst the underlying BTC volumes show strong activity, it is nothing compared to what it could be right now as demand for BTC remains very high and supply is slowing, which normally means prices go up right.

Quarter 4 always surprises us, so never say. It is worth remembering that it is still early days although BTC is nearing a decade of existence it is only the past two years that have seen the crypto economy explode. This pre-pubescent crypto economy is experiencing the teenage years before maturity. The new Crypto Capital Markets will emerge from this far stronger but it will take a few more years to understand, as regulators try to hold it in check, banks try to destroy it one moment, then make money from it the next they are, after all, bankers and let us remember the majority of the crowd remain unaware of Bitcoin.

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