South Africa’s Central Bank Says It’s ‘Too Risky’ to Issue Digital Currency

The deputy governor of the South African Reserve Bank (SARB) has said that it would be ‘too risky‘ to start issuing its own digital currency.

Speaking at the Strate GIBS FinTech Innovation Conference 2017, Francois Groepe, the deputy governor of the South African Reserve Bank, commented on the development of a digital currency such as bitcoin. However, while bitcoin is gaining dominance, he stressed that the central bank needs to ensure that payment methods aren’t abused to fund money laundering or terrorism.

He noted, though, that digital currencies are becoming more recognised as people understand their concept.

As a result, he said that:

“Virtual currencies have the potential of becoming widely adopted. However, for the central bank to issue virtual currencies or cryptocurrencies in an open system will be too risky for us. This is something that we really need to think about.”

According to Groepe, though, the central bank has created a three-member team to look into how cryptocurrencies work. The bank is also expected to launch a digital currency sandbox to test how they function.

He also discussed the financial industry and how innovation is changing the sector, mainly through digital currencies.

He added:

“We are witnessing the disruption of financial services. Over the past decade or so, fintech’s attention and publicity has continued to intensify and increase. It is continuing to usher in completely new ways of banking. Developments in the fintech space are part of an evolutionary process driven by innovations.”

Bitcoin Dominates the Market

As of the 23th August bitcoin is trading at $4,239. This is a 6.93 percent increase in 24 hours, but a 0.08 drop in seven days. At press time, the digital currency’s market cap is worth over $70 billion.

Just yesterday, bitcoin’s price was listed at $3,674 as it underwent an early-week correction period. As a consequence, its market cap value dropped to $60.7 billion. However, this price rally has helped to push it back over the $4,000 mark. The recent drop in price is believed to be down to a hashrate shift from bitcoin to bitcoin cash.

According to a recent report, bitcoin cash surged to a new all-time high on the 19th August when it reached $914. Furthermore, the alternative to bitcoin was reported to have mined its first eight megabyte block, clearing nearly 40,000 transactions. According to data from Coin Dance, bitcoin cash had become 69 percent more profitable to mine than bitcoin.

Not only that, but concerns have been circulating the SegWit and SegWit2x debate, which may have pushed bitcoin’s price down.

Despite this, however, the number one currency is still the leader in the field. Ethereum, in second place, has a market cap worth $30.2 billion. Whereas, bitcoin cash, in third place, is valued at $10.9 billion. Nevertheless, fourth placed ripple is close behind with a market value amounting to $10.8 billion.

Are Fears Justified?

Considering the dominance that bitcoin is showing in the market, it’s may be surprising that South Africa’s central bank thinks it’s too risky to start issuing their own version.

Last August, it was reported that The Bank of England had issued its own digital currency. Known as the RSCoin, it shares similar traits to bitcoin such as being managed by the blockchain. However, one of its key differences is that it is centralised within The Bank of England. As a result, only one bank generates each unit of the digital currency.

The bank has keenly embraced the blockchain, which is evident in an excerpt from a quarterly bulletin. It says:

“… the key innovation of digital currencies is the ‘distributed ledger’ which allows a payment system to operate in an entirely decentralized way, without intermediaries such as banks.”

Not only that, but according to the U.K.’s central bank, they don’t see that digital currencies ‘pose a material risk to monetary or financial stability in the United Kingdom.’ However, it will continue to monitor developments in this area.

No doubt aware of how finance is changing, The Bank of England appear keen to maintain a hold on the sector even if that means issuing their own digital currency.

SARB Begins Testing Digital Currency Regulations

Yet, while South Africa’s bank may not be issuing its own cryptocurrency anytime soon, the bank has been discussing regulations for bitcoin.

As a result, SARB are reported to be having discussions with blockchain-based solutions provider Bankymoon. According to a report, the central bank and Bankymoon are to undertake an experiment to test regulations for the digital currency.

Both, however, are in the early stages of seeing where the partnership can go.

Loerien Gamaroff, CEO of Bankymoon, said:

“This is because the Reserve Bank is very hesitant to give a stamp of approval on anything that comes out. The sandbox will only be bitcoin focused during this initial phase, but is focused on applying broad regulations to all cryptocurrencies.”

He adds, though, that it will give a formal foundation to bitcoin, which people will be able to trust.

“I think the regulation will move things along and make people on the street comfortable with bitcoin. With these new regulations, these everyday people can now trust that bitcoin is not just for hackers and criminals.”

The bank has, in the past, expressed its interest in blockchain and digital currencies. So much so, that the bank’s governor stated that it was willing to consider the benefits that the technology could present.

At the time, Lesetja Kganyago, the governor of SARB, said:

“As a central bank, we are open to innovations despite the different opinions of regulators on matters such as cryptocurrencies. We are willing to consider the merits and risks of blockchain technology and other distributed ledgers.”

Taking Small Steps

It remains to be seen what’s next for the central bank. However, the bank has already made significant progress so far. The fact that it has started proceedings into the regulation of digital currencies is a step forward. Nothing is going to happen overnight, but these steps remain positive for the country, which is seeing an increasing number of people using bitcoin for day-to-day purchases.

Featured image from Shutterstock.

Bitcoin Critic Mark Cuban Backs Coinbase Employee’s Token Fund

Is Mark Cuban having a change of heart regarding the cryptocurrency space? The billionaire entrepreneur and investor said recently that he wants a slice of the sector despite saying that bitcoin is in a bubble.

According to reports, Cuban is investing in 1confirmation. It’s headed by former product manager at Coinbase and Runa Capital principal, Nick Tomaino. Launched on the 22nd August, Tomaino is seeking to raise $20 million for a fund that will invest in cryptographic assets.

The company is already attracting early backers. One of which is bitcoin critic Mark Cuban.

Bitcoin is in a Bubble

Earlier this year, Cuban took to Twitter to claim that the digital currency was in a bubble. At the time, bitcoin was trading around $2,900. During his tweets, he said:

“I think it’s in a bubble. I just don’t know when or how much it corrects. When everyone is bragging about how easy they are making $=bubble.”

After his comment, the price of bitcoin dropped, which seemed to confirm his opinion that the digital currency is in a bubble. Despite this slight drop in price the currency has continued to scale to new heights. At the time of press, on the 22nd August, bitcoin is trading above $4,000 at $4,079.

Sees Potential in the Blockchain

Despite his criticism toward the cryptocurrency, Cuban believes the blockchain holds great potential.

At the time, he said:

“I think blockchain is very valuable and will be at the core of most transactions in the future. Healthcare, finance etc all will use it.”

More recently, Cuban restated his believe in the blockchain.

“I have always looked at blockchain as a foundation platform from which great applications can be built.”

What is 1confirmation Setting Out to Do?

1confirmation has been created to make initial investments amounting to $100,000 and $500,000. It will put these in a range of SAFTs (Simple Agreement for Future Tokens) and SAFEs (Simple Agreement for Future Equity), which are designed to aid investors to buy tokens prior to an ICO.

It then aims to help those companies develop their product rather than investing in ICOs.

The ICO Craze Gains Momentum

In the first six months of 2017, more than $1.2 billion in cryptocurrency had been raised through ICOs. This outpaced venture capital investment in blockchain and bitcoin companies, according to Autonomous NEXT. At the time, Charles Hoskinson, ethereum’s co-founder, said they are ‘a ticking time-bomb.’ He added that as a result, there was now ‘an over-tokenisation of things.’

Several months later, in August, and that figure now amounts to $1.8 million. This is according to CoinDesk’s ICO Tracker.

As such, Tomaino’s fund follows that of others who are keen to start funds to invest money into digital currencies. Of course, that’s not to say that some ICOs aren’t scams or that they aren’t targeted by hackers.

Enigma ICO Hack

Recently, it was reported that as much as $500,000 in ether was stolen from supporters of the Enigma blockchain project.

Following a security compromise, hackers gained control of the project’s website domain, one of its Slack administrator accounts and its mailing list. Enigma released a statement, saying:

“At this time, the Enigma team has retaken control of all compromised accounts, including the website. Some pages will remain deactivated for the time being while the team works. Please continue to be vigilant and check our communications across ALL channels. Do not send any money or personal information to anyone.”

Interestingly, around the time that CoinDash experienced a hack during its ICO, which resulted in $7 million of ether stolen, Can Kisagun, the co-founder and chief product officer of Enigma, said his company had a simple solution to preventing similar attacks.

In a report from July, Kisagun said:

“Hackers got into the backend of the site and changed the address.”

As a result, investors sent their money to the wrong ethereum address. At the time Enigma’s solution was to hard wire the address of the token sale contract into the ethereum or bitcoin blockchains when it was getting created, according to Business Insider.

Unfortunately, such a measure didn’t prevent hackers from gaining access to over $500,000 in ether from Enigma supporters. No doubt this will be a significant blow to the company who has become a target from hackers like so many other ICO funds.

Parity Gets Targeted Too

Smart coding company Parity has also been targeted by hackers. On the 19th July, shortly after the CoinDash hack, reports arose that it had suffered a security breach. Data from Etherscan found that more than 150,000 ether was stolen. At the time this was worth around $35,000.

On the organisation’s blog, the company listed the situation as critical. As a result, users were urged to move ‘assets contained in the multi-sig wallet to a secure address.’

Cuban’s Foray into Cryptocurrencies

Yet, despite the number of hacks that several ICOs have experienced, they still attract a crowd. And no doubt they will continue to do so.

As a result, Cuban is expected to continue his journey into the digital currency space. Aside from 1confirmation, the billionaire entrepreneur will be investing in tokens sold by his portfolio company Unikrn. He is also planning to invest in a third digital currency-related fund in the future, reports Bloomberg.

Cuban added, though, that it’s hard to establish any value to bitcoin.

“If everyone continues to tell their grandparents, cousins and co-workers to buy, the price can go a lot higher as there is a definable, finite amount, but if the number of buyers dry up or there are a few massive sellers we could see under $1,000 again.”

He concludes:

“None of this has anything to do with the applications that can be built with blockchain. The question is whether great companies can be financed and built and I think the answer is yes.”

It remains to be seen what else is in store for Cuban, but he appears adamant that the blockchain is something that needs to be looked into further. The fact that he is backing a crypto fund could see him eventually backing bitcoin in the future.

Featured image from Shutterstock.

Here’s Why Commodities Whiz Dennis Gartman is Avoiding Bitcoin

Bitcoin is trading under $4,450, but according to investor Dennis Gartman he’s not buying into the digital currency.

According to the editor and publisher of The Gartman Letter, he doesn’t understand bitcoin.

He said:

“It is a punter’s dream. I give them credit for that, but it is something that I will absolutely stay away from, have stayed away from it, didn’t understand it to begin with, don’t understand it now.”

As of the 17th August, bitcoin is trading at $4,439, pushing its market cap to $73.3 billion. In the past 24 hours its value has risen by seven percent. Over the last seven days it has increased by 31.24 percent, according to CoinMarketCap.

Despite bitcoin’s dominance, Gartman remains weary. So much so, that the currency’s price fluctuation isn’t convincing him to invest. The highest figure it has reached was when it was within touching distance of $5,000 at $4,482. Shortly after it dropped to just above $4,000.

He states:

“What bothers me is that something that can move 5, 10, 15, 18 percent in the course of the day for what’s supposed to be a pricing mechanism. How can you buy a house? How can you buy a car? How can you buy Starbucks with bitcoin when the price is going to fluctuate as [dramatically] as it has?”

Bitcoin’s Value Quadruples

Since the beginning of 2017 the number one cryptocurrency has seen its value quadruple. Then its market value was worth just $16.5 billion. While that was still an impressive figure, it’s not anywhere near what it has achieved to date.

According to a report, if bitcoin was a stock it would rank as the seventy-fourth biggest by market capitalisation. This would put it in league with Adobe and Netflix on the S&P 500. Adobe has a market value of $73.6 billion while Netflix is worth $73.8 billion.

It has already passed the likes of PayPal, Costco and Salesforce.

Furthermore, by 2030, research by U.K.-based Magister Advisors suggests that bitcoin will become the sixth largest global reserve currency. After interviewing thirty leading bitcoin companies they believe it could be as widely used as the Swiss franc or the Australian dollar.

Optimism over Bitcoin

It’s now getting harder for investors to ignore digital currencies. That’s according to Goldman Sachs.

On the 5th August, when bitcoin reached $3,200 for the first time, analyst Robert D. Boroujerdi and his team said:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

Nearly two weeks later and the market cap value is worth $144.6 billion.

Naturally, with the digital currency continuing to dominate the market, investor interest is increasing. Not only that, but many are turning to bitcoin as a safe haven amid geopolitical turmoil.

In light of North Korea’s nuclear threat there has been a global selloff in stocks and bonds.

Recently, Brian Kelly, a CNBC contributor and head of BKCM, which runs a digital asset strategy, he said:

“Bitcoin is benefiting from geopolitical tensions – trading in Japan and Korea has increased significantly over the last few months.”

Furthermore, Fidelity Investments announced that they would be allowing clients to see their bitcoin and ethereum holdings on Coinbase. This is a rare example of an established financial services company being embracive toward digital currencies.

Hadley Stern, senior vice president and managing director at Fidelity Labs, said:

“This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them.”

Abigail Johnson, Fidelity’s CEO, has, in the past, spoken about her enthusiasm over the digital currency market.

Can it Scale $7,500?

With the current trajectory that bitcoin is on, one has to wonder how far it can go?

Ronnie Moas, Standpoint Research founder, recently made a revised projection that the digital currency could reach $7,500. In July he stated that it would scale to $5,000 predicting this would be achieved by 2018.

In light of bitcoin’s recent movements $7,500 is his new estimate.

According to Moas:

“What’s happening is the floodgates are opening. I believe there are hedge funds and very deep-pocketed individuals going into this now, really hundreds of millions of dollars.”

He also thinks that the value of bitcoin will climb to $50,000 by 2027. Compared to others, though, Moas’ estimations are quite conservative, which he admits to.

$100,000 Predictions

Unlike Moas, Dennis Porto, a bitcoin investor and Harvard academic, he predicts that bitcoin’s value will jump to $100,000 by February 2021. He thinks this is possible if the currency follows Moore’s law.

He said:

“Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time.”

According to Porto, since bitcoin was introduced in 2009 it has double every eight months. Therefore, until it reaches mass adoption, he thinks bitcoin could reach $100,000 by 2021.

Kay Van Petersen, a Saxo Bank analyst has also predicted a $100,000 future for the digital currency. However, he thinks this will happen in 10 years time.

In a report, Van Petersen said that while his estimations are ‘conservative’ he believes in where the market is going.

He said:

“This is not a fad, cryptocurrencies are here to stay. There will emerge two to three main ones. Bitcoin will be one of those. And the reason is the first-mover advantage, the scale and the pioneering.”

Interestingly, this is the same analyst who rightly predicted that bitcoin would reach the $2,000 mark by 2017.

A Wait and See Approach

All that remains is to wait and see what will happen next. Will bitcoin’s price go up or will it go down? Who knows, but a period of adjustment is to be expected. With such massive gains the digital currency will undergo a price correction.

According to Sheba Jafari, Goldman Sachs’ chart analyst, the cryptocurrency is currently in the ‘fifth wave’ of an ‘impulsive’ rally.

She thinks, in the short-term, its price will rise to $4,827 before entering a corrective phase.

She adds:

“This can last at least one-third of the time it took to complete the preceding advance and retrace at least 38.2 percent of the entire move.”

As such the digital currency could drop as low as $2,221 in Jafari’s opinion. For now, though, many are enjoying the advancements that the currency is making.

 

Featured image from Shutterstock.

Bitcoin Reaches All New-Time High Near $4,500; Drops to $4,000

The price of bitcoin soared above $4,400 and was within striking distance of $4,500 for the first time.

In the early hours of the 15th August, the digital currency recorded a new all-time high of $4,482, according to CoinDesk’s Bitcoin Price Index (BPI).

As can be seen from the chart above, throughout the day bitcoin’s price has continued to fluctuate.

At the time of publishing, bitcoin is trading at just above $4,000 at $4,018, according to figures from CoinMarketCap.

As a result, it has seen a -6.03 drop in value within the past 24 hours, but a 17.69 percent increase over the past seven days.

This slight dip in price comes after days of record highs, which has seen the currency’s market value soar to over $72 billion. At present, it’s worth $66.3 billion. The drop in price could be due to investors taking some profit after the rapid rise, which is to be expected.

Since the beginning of the year, though, the price of the digital currency has quadrupled in value. This has been spurred on by strong interest from the Japanese as well as geopolitical turmoil in North Korea.

Despite a drop in value, Ronnie Moas, stock research analyst and founder of Standpoint Research, said that bitcoin could reach $7,500. This price is a revision from his early $5,000 price projection for 2018.

Moas said in light of the new $4,000 mark that:

“What’s happening is the floodgates are opening. I believe there are hedge funds and very deep-pocketed individuals going into this now, really hundreds of millions of dollars.”

Bitcoin Market Cap Nears Netflix

When bitcoin’s market cap reached $72 billion it was reported to be within striking distance of major stocks like Netflix.

According to a report from CNBC, if the cryptocurrency was a stock it would rank as the seventy-fourth biggest by market capitalisation. Such a position would put it behind Adobe and Netflix on the S&P 500. Adobe has a market value of $73.6 billion while Netflix is worth $73.8 billion.

At present, bitcoin’s market value has already overtaken Paypal, Costco and Salesforce. Bitcoin isn’t a stock, though, as many investors view it as a currency or commodity.

However, due to its finite supply of coins, capped at 21 million, Moas is one individual who believes this could push bitcoin’s price up.

Riding an Impulsive Rally

Other analysts are being more bearish.

Sheba Jafari, Goldman Sachs’ chart analyst, said that the digital currency is riding a ‘fifth wave’ of an ‘impulsive’ rally. As such, Jafari thinks bitcoin’s price will rise to $4,827 in the short term.

She said:

“Once a full five-wave sequence is in place, the market should in theory enter a corrective phase.”

She adds:

“This can last at least one-third of the time it took to complete the preceding advance and retrace at least 38.2 percent of the entire move.”

Jefari said that this could see the digital currency drop to as low of $2,221.

Bitcoin Price Swings

If such a situation proves itself true, it won’t be the first time that the market has experienced a price correction.

When bitcoin sailed through the $3,000 barrier in mid-June it subsequently lost over $1,000 in value. On the 15th June, the digital currency was trading at $2,330, pushing its market cap down to $40 billion.

On the 26th June, the community underwent an anticipated price correction. While Fred Wilson, digital currency investor and Union Square Ventures partner, wrote in a blog post that:

“My gut says we are headed for a selloff in the crypto sector.”

Not All Doom and Gloom

It’s natural that the market will experience a slight drop in price after its rapid rise. Many think, though, that in the long-term its price will increase into the hundreds of thousands.

Dennis Porto, a bitcoin investor and Harvard academic, is one individual who has projected a high price. So much so, that he believes bitcoin will reach $100,000 by February 2021. He claims this is possible if it follows Moore’s law.

Kay Van Petersen, a Saxo Bank analyst, has predicted that the digital currency’s price will reach $100,000 in 10 years. This is the same analyst who rightly predicted that bitcoin would reach the $2,000 mark in 2017.

Not as bullish is Tom Lee, a strategist at Wall Street firm Fundstrat. He thinks that by 2020, the digital currency will be worth between $20,000 and $55,000.

As can be seen, though, these projections paint a bright future for the digital currency’s market. As a result, it’s becoming harder for investors to ignore the cryptocurrency sector. This is according to Goldman Sachs, who recently said in a note that:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

At the time of publishing the entire market cap value is worth $133.3 billion.

Altcoins Drop in Value

It’s not just bitcoin that has seen a drop in value.

Ethereum’s price has dropped too. At present, it’s worth $285 and has seen a -4.19 percent drop in 24 hours. Over the last seven days, its value has decreased by -0.38 percent. Its market value is now worth $26.8 billion.

Third place ripple has dropped in price as well. It’s now trading at $0.160454 and has a market cap of $6.1 billion. In 24 hours its value has decreased by -5.27 percent and in seven days it has dropped by -12.38 percent.

Bitcoin cash, in fourth place, has experienced a slight drop too. At present, it’s trading at $295 with a market cap of $4.8 billion. Over 24 hours it has dropped by -1.05 percent and in seven days a decline of -15.31 has been reported.

Despite these price declines, eight place NEO is steaming ahead. Its market cap is currently worth just over $2 billion and is trading at $41.86. Even though it has dropped by -9.81 percent in 24 hours over seven days it has increased its value by an impressive 142.25 percent.

It remains to be seen how far this altcoin can go.

Furthermore, the community will be watching and waiting to see how much further the price of bitcoin will drop or if another surge in its price will be recorded. For now, many traders are enjoying this price rise which is producing big profits for many.

Featured image from Shutterstock.

10 Digital Currencies Now Have Market Values Totalling Over $1 Billion

The number of digital currencies that have exceeded a market value of $1 billion is 10 with values ranging from $1.3 billion to $70 billion.

The top 10 cryptocurrencies with market values exceeding $1 billion include bitcoin, ethereum, ripple, bitcoin cash, IOTA, litecoin, NEO, NEM, dash and ethereum classic.

 

Bitcoin, the Number One Ranking Currency

In first place is bitcoin with a market value amounting to $70 billion. At press time, it is trading at $4,245, which has seen a 5.42 percent rise over the past 24 hours and a 27.03 percent increase in the last seven days.

After recently scaling the $4,000 mark, there is still huge demand for the digital currency. This is despite the 1st August user activated hard fork, which saw the creation of bitcoin cash. It remains to be seen how far bitcoin can go, but many are predicting it can easily reach $5,000 and even higher.

Ethereum Drops Below $300

Second place ethereum had attained the $300 mark again after flirting with the price for some time last week. Now, it’s trading at $297 with a 0.68 percent rise in 24 hours and 11.23 percent increase in seven days. Its market cap is worth $28 billion.

At one point, it looked as though ethereum may push bitcoin off the top spot as it steadily gained on the digital currency. Now, though, that doesn’t look likely. The currency has come a significant way since the beginning of the year when it was trading at $8.24, according to CoinMarketCap.

Ronnie Moas, Standpoint Research founder, believes it can go much further. He’s predicting that by 2018, ethereum’s price will be listed at $400.

Ripple Maintains Third Place

At the beginning of August, Ripple has lost its third place position to newcomer bitcoin cash; however, it has since reclaimed the third ranking spot.

Currently trading at $0.169272, it has a market value amounting to $6.7 billion. Over 24 hours its value has increased by 0.47 percent, but within seven days it has dropped in price by -5.95 percent. The digital currency is doing well to maintain hold of third place, but for how long?

Newcomer Bitcoin Cash Falls into Fourth

Bitcoin cash is the newest digital currency to enter the market. It’s also one that has entered the top 10 field so soon after its launch.

Created by supporters who wanted a solution to bitcoin’s scaling issues, bitcoin cash has garnered support since it entered the scene on the 1st August.

At the time of publishing, it is trading at $299, which has seen a slight drop in value over 24 hours of -2.96 percent. Yet, it has increased by 4.02 percent in the past seven days. Ranking third when it first came on the scene, it had a market value of nearly $12 billion. Now, though, it’s currently sitting at $4.9 billion.

At its peak, bitcoin cash was trading at $727 on the 2nd August. However, the chart below indicates a steady decline in price.

At its lowest, bitcoin cash was trading at $201 on the 5th August. After making it easier to find blocks for the digital currency its price peaked up slightly, but it has yet to see $700 figures again.

IOTA Grabs Fifth Place, Pushes Litecoin into Sixth

IOTA has shown some positive returns on its price in August. As such its price has steadily increased over the month. At the time of publishing, the digital currency is trading at $0.885418 and has seen an 18.37 percent in the past 24 hours. Over seven days, its value has increased by 87.29 percent.

This surge in value is believed to be down to the fact that it has announced collaborations with several groups such as a non-profit organisation helping refugees. Joining the $1 billion club on the 4th August, IOTA currently has a market value of $2.461 billion.

Litecoin is Close Behind in Sixth

Sixth place litecoin is close on the tails of IOTA with a current market value of $2.401 billion. It’s currently trading at $45.66 and has seen a -0.70 percent in 24 hours and -0.33 percent in the past seven days.

Over the past couple of years the price of litecoin has remained within the $3-5 range. However, it wasn’t until April 2017 that its price increased. This was helped along by the activation of SegWit on its network. The support of litecoin on Coinbase also played a role. At its highest litecoin has achieved over $50.

Moas is of the opinion that by 2018, litecoin could easily see it trading at $80. It remains to be seen whether or not the digital currency achieves this price, but it is steadily rising in price, which is giving confidence to many of its traders.

‘Chinese Ethereum’ NEO Takes Seventh

Formerly known as AntShares, NEO – known as the Chinese Ethereum – has a market value worth $2.3 billion. Since undergoing a rebrand the digital currency has soared in value.

In the past 24 hours, it has seen a 1.17 percent increase, but over the past seven days its value has jumped by 154.80 percent. It’s trading at $46.63.

This chart, alone, indicates how far NEO has come in 2017.

NEM Takes Eighth Place

Grabbing hold of a $2.094 billion market cap value is NEM. It’s currently trading at $0.232741, but has seen a -12.14 percent decrease over the past 24 hours and a -13.89 drop in seven days.

As can be seen NEM has experienced a surge in price over the first half of 2017. As we continue into the second half it remains to be seen if the digital currency can produce a higher price.

Dash Falls into Ninth

With a market cap of $1.471 billion, Dash is currently sitting in ninth position. At the time of publishing it’s trading at $196, but has seen a -3.43 percent drop in 24 hours. Over seven days, however, its value has risen by 1.29 percent.

On the 6th July, its value was trading at $222 when its market value was listed at $1.648 billion.

Ethereum Classic Makes Number 10

In tenth place is ethereum classic with a market cap value of $1.3 billion. Even though this is the original ethereum before a hard fork took place, which saw two ethereum coins, the community hasn’t shown too much support for the original version.

At the time of publishing this altcoin is trading at $14.14, which has seen a -1.81 percent decrease in 24 hours and a -7.81 percent drop in seven days.

As shown from the chart above, it was back in June when ethereum classic recorded a high of nearly $23, helping to push its market value to $2.1 billion.

Of course with the market producing such changeable values the top 10 could easily change, pushing some down and others not mentioned up. Who knows who will be next to join the $1 billion club.

Featured image from Shutterstock.

Goldman Sachs: It’s Harder for Investors to Ignore Digital Currencies

Goldman Sachs has said to clients that the boom in value that digital currencies are experiencing is ‘worth watching.’

Analyst Robert D. Boroujerdi and his team, said in a note to portfolio managers, that:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

On the 5th August, the price of bitcoin reached $3,200 for the first time in its history. Prior to reaching that milestone it hadn’t seen $3,000 figures since the 12th June. Then it recorded a price of $3,041, according to CoinDesk’s Bitcoin Price Index (BPI). Ethereum also recorded a new high price when it soared through $400.

More recently, bitcoin’s price has pushed through $3,300 and $3,400 with its sights set on reaching $3,500.

At the time of publishing bitcoin is trading at $3,390 and has a market cap worth just under $56 billion on the 10th August.

Over a 24-hour period, its value has increased just over two percent with a 23 percent rise within the past seven days.

Ethereum Flirts with $300

Ethereum, too, is seeing a rise in its value. At the moment it is trading just two dollars under the $300 mark.

Its price has risen by 2.17 percent over the past 24 hours and 33.50 percent within the past seven days. Of the top five digital currencies it has seen the biggest increase in price over the past week. Its market cap is now worth just over $28 billion.

The entire market value of the digital currencies is worth $122.6 billion. On the 7th August, it was $117 billion; however, on the 8th August it rose again to $121.8 billion. The lowest recorded price was down at $60 billion in July.

Bitcoin Cash Still Stays in Fourth

As can be seen from the table above, bitcoin cash, the newest altcoin on the block, remains in fourth place. It’s currently trading at $287 with a market value worth $4.7 billion. Over the past 24 hours, its value has dropped by 14.66 percent whereas it has declined by 33.77 percent over the past seven days.

On the 8th August, its value had risen to $358, experiencing a 35.45 percent rise which saw a market value of $5.9 billion. This was down to the fact that it is now easier for miners to find blocks. At the time it was questioned whether this would subsequently rise the coin’s value. As can be seen, though, bitcoin cash is still going through a fluctuating phase, which will continue to see its price rise and fall.

Digital Currencies Are Worth Watching

Now, in a significant step forward, Goldman Sachs believe that the rise of digital currencies are worth watching.

This year bitcoin has seen a 200 percent rise in price while ethereum has experienced a colossal 3,500 percent increase. The year 2017 is certainly proving to be a great year for the market and we’re only into August. It will be interesting to see how much further the sector can go.

Not only that, but the market has seen a rise in interest with initial coin offerings (ICOs), which is attracting a large number of investors.

It was earlier reported that in the first six months of 2017, over $1.2 billion in digital currencies had been risen through ICOs. So much so, that this figure outpaced venture capital funding in blockchain and bitcoin companies.

Yet, according to Charles Hoskinson, ethereum’s co-founder, who now runs research firm IOHK, they are a ‘ticking time-bomb.’

In an interview, Hoskinson, said:

“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb. There’s an over-tokenisation of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

Despite this, though, people are still flocking to ICOs. In July, it was reported that Tezos, a blockchain project, had announced the largest ICO to date after raising $232 million in bitcoin and ethereum coins. This outpaced the ICO for blockchain project Bancor, backed by Tim Draper of VC fund Draper Fisher Jurvetson, which raised $153 million in ether in June.

According to Goldman Sachs:

“Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are) real dollars are at work here and warrant watching especially in light of the growing world of initial coin offerings (ICOs) and fundraising that now exceeds Internet Angel and Seed investing.”

Yet, while digital currencies are attracting a mammoth amount of interest, the bank adds that the market cap of all the cryptocurrencies equals to less than two percent of all the gold that is mined in the world.

Not only that, but while there are over 1,000 altcoins on the market, only around 800 of them actually have a market cap value. Yet, of those some have relatively small market caps. The smallest, at 817, has a market cap of just $18.

Boroujerdi and his team adds:

“There are currently over 800 cryptocurrencies out there, though just 9 have a market cap in excess of $1 billion.”

Bitcoin’s Value to Increase?

Many are projecting, however, that the value of bitcoin will increase.

Despite the recent user activated hard fork (UAHF), which saw the creation of bitcoin cash, bitcoin’s price hasn’t been affected. In fact the opposite of what was expected to happen, happened. Such a situation indicates that bitcoin has matured to such an extent that even a new digital currency won’t impact it.

According to Ronnie Moas, Standpoint Research founder, he believes that bitcoin will rise to $5,000 by 2018. He also predicts that ethereum will increase to $400 and litecoin will trade at $80.

Back in July, Moas indicated that bitcoin could reach $5,000 ‘in a few months,’ but has now extended the time he thinks this will happen. Confident as to where the market is going, he said:

“In my view, 10-15 years from now, the charts on a few of the top 20 names will look like the Amazon, Apple, Tesla, Facebook, Netflix and Goggle charts look today.”

Others believe that its value can increase even further. By 2020, a Wall Street analyst has made a bullish prediction and thinks bitcoin will be worth $55,000. With such varying prices, it remains to be seen who is the closest.

Featured image from Shutterstock.

Malta’s First Bitcoin ATM Sees Warning from Financial Regulator

Malta’s financial regulator has issued a warning with the intention of preventing the adoption of digital currency use after the country installed its first bitcoin ATM.

At the end of July, it was reported that Malta had installed a bitcoin ATM in the town of Sliema where it is operated by Venture Trading. One of its services will be to convert bitcoin to euros.

The installation of the machine marked a significant step for the island nation. Local startup Ivaja, who introduced the machine to Malta, is focused on making the country a ‘Bitcoin Island.’

According to the startup, though, many feel that Malta is not ready for bitcoin and too far behind in the race.

Now, it seems that the country’s financial regulator doesn’t approve of the bitcoin ATM. After Malta’s first digital currency ATM received so much coverage, the Malta Financial Services Authority (MFSA) issued a warning to potential users.

It said:

Unlike traditional money, acceptance of payment in virtual currency depends entirely on the voluntary consent of the recipient. Furthermore providers of services in relation to virtual currencies are currently neither regulated by law nor authorised by the MFSA.

However, if users do use the digital currency, the MFSA added that potential users should proceed with caution when using a digital wallet as they would with a traditional one.

You should not keep large amounts of money in it and ensure you keep it safe and secure. You should also familiarise yourself with the ownership, reputability, transparency and public perception of the exchange platforms that you are considering using.

Confusing Positions

This will, no doubt, confuse many people in Malta who are interested in the digital currency market. Not only that, but the MFSA’s warning is in stark contradiction to Joseph Muscat, Malta’s prime minister.

In his opinion, the country ‘must be on the frontline in embracing this crucial innovation’ and that they can’t simply wait for others to proceed before copying them.

Speaking at a conference organised by the financial affairs parliamentary committee, he added:

“This is not just about bitcoin, and I also look forward to seeing blockchain technology implemented in the lands registry and the national health registries. Malta can be a global trail-blazer in this regard.”

Supportive of the digital currency, Muscat has even called on EU leaders to embrace bitcoin.

He points out by saying:

“My point is that rather than resist, European regulators should innovate and create mechanisms in which to regulate cryptocurrencies, in order to harness their potential and better protect consumers, while making Europe the natural home of innovators.”

Malta Unveils Plans to Embrace the Blockchain

Just after the announcement of Malta’s first bitcoin ATM, the government announced that it had started unveiling its plans of making Malta become one of the first countries to embrace the blockchain and bitcoin at casinos.

According to Silvio Schembri, MP for the Labour Party, the country will become an international hub for the technology.

He said:

“We’ve heard enough about the opportunities posed by blockchain and it’s now time to put words into action to create new opportunities for both citizens and the economy. It’s my priority to turn this vision into a reality.”

Schembri claims that similar to the Malta Gaming Authority (MGA), which regulates and hands out licenses to the gaming industry, there will be a new industry that regulates the blockchain sector in Malta.

Schembri said:

“There are many of these companies out there who are itching to have a proper licence under which to operate, and we could be the first in Europe – if not the world – to provide them. Some oil companies are interested in shifting to blockchain – can you imagine how much money we can earn through taxation if they register in Malta?”

With such a proactive interest in bitcoin and the blockchain, it’s clear that Malta knows what it must do to push the country forward in a way that will allow it to maintain pace with other countries in similar fields.

The MFSA Hampers Innovation

Unsurprisingly, after the MFSA’s announcement some have come out to claim that the financial regulator’s warning is no longer ‘justified.’

BitMalta, a Maltese bitcoin and virtual currency advocacy group, said:

“[The warning] would have been justified five years ago in view of the yet-uncertain nature and effect of cryptocurrencies, but not in this day and age when jurisdictions worldwide are readying themselves for acceptance of cryptocurrencies rather than shying away from this technological revolution.”

It added:

“We are extremely disappointed, to say the least, that whereas Malta’s Prime Minister Dr. Joseph Muscat and Hon. Silvio Schembri, the  Parliamentary Secretary for Financial Services, Digital Economy and Innovation, are actively advocating the adoption of blockchain technologies and cryptocurrencies in Malta, the MFSA stubbornly choose to ignore developments in the area and quote long-since settled risks pertinent to cryptocurrencies.”

According to BitMalta, the blockchain is the ‘next big thing,’ and that it will echo the disruption that the Internet created in the late 90s.

It said:

“It is therefore of utmost importance to create incubators for such thriving projects to grow unmolested and study them closely, and this ostrich-in-the-sand approach adopted by the MFSA is anything but proactive.”

Rather than scaring the public on a topic that they may know little about, BitMalta suggests taking measures to educate the public, claiming that digital currencies are here to stay ‘whether you ban them or not.’

It remains to be seen what impact, if any, this has on bitcoin adoption in Malta. It’s hoped, though, that with more understanding of the market the financial regulator will become open-minded of it.

The digital market, and in particular bitcoin, doesn’t appear to see waning support anytime soon. So rather than tarring it with a negative brush, why not research more into it. By doing so, those who are against it may find out that it’s not so scary after all, but a viable way for people to reclaim their financial freedom back.

Featured image from Shutterstock.

Bitcoin to Climb to $5,000; Tech Leaders Say Fork May Increase Volatility

An independent stock research analyst has said that the price of bitcoin will increase to $5,000, ethereum will double to $400 and litecoin will jump up to $80 from $40 by 2018.

Ronnie Moas, Standpoint Research founder, made his predictions in his report on digital currencies – the first two parts of the 122-page report were recently published – where he wrote:

“In my view, the genie is out of the bottle, and cryptocurrencies will continue to rise and take market share away from stocks, other precious metals, bonds and currencies.”

He added:

“I think investors should take a shot on this and hold for a few years. If you lose a few bucks, at least you took a shot. In life, you miss every shot that you do not take. It will probably be more upsetting to watch it (from the sidelines) go up another 1,000%.”

According to Moas, bitcoin will rise to $5,000 while the second most popular digital currency, ethereum, will double its value to $400. Litecoin, currently ranked number five, behind ripple and bitcoin cash, will increase its price to $80.

These predictions were made before the launch of the newest coin on the block, bitcoin cash, so it’s not clear where his position lies with that digital currency.

Moas, however, states that he has bought 10 of the top twenty digital currencies by market capitalisation. This is the first time he has done so and is confident as to where they are going.

He adds:

“In my view, 10-15 years from now, the charts on a few of the top 20 names will look like the Amazon, Apple, Tesla, Facebook, Netflix and Goggle charts look today.”

In July, Moas said that he expected the price of bitcoin to increase to $5,000 ‘in a few months.’ He also mentioned that had recently bought bitcoin, ethereum and litecoin.

Speaking in an interview at the time, he said:

“$5,000 could happen in a few months. It’s only starting to gain traction right now. It’s starting to spread like wildfire right now.”

He believes that its value will increase to new heights because the amount of bitcoins is capped at 21 million. As the number of bitcoins reaches its limit, it will increase demand, which in turn will push its price up.

At the time of publishing, the price of bitcoin was trading at $2,727, according to CoinMarketCap. The digital currency has seen as 0.49 percent rise over the past 24 hours and a 6.14 percent increase in the last seven days. Its market cap is worth just under $45 billion.

Ethereum is up at $221. Even though it saw a 1.62 percent decline in the last 24 hours, it has risen 8.31 percent over the past seven days. It now has a total cap value of $20.7 billion.

Bitcoin cash, which now takes third place among the top 10 digital currencies, is currently trading at $449. It has risen 5.41 percent within the past 24 hours and 3.14 percent in the last seven days. Its market value is worth $7.4 billion. Its value puts it comfortably in front of ripple with a market value of $6.5 billion and litecoin, which is currently worth $2.2 billion.

Could Bitcoin Split Increase Volatility?

On the 2nd August, the bitcoin community saw a bitcoin fork take place. This created bitcoin cash. Now among the top 10 digital currencies, the new coin has helped to push the total market value up to over $100 billion. Prior to the fork, that figure was resting at $91 billion. It remains to be seen whether the market will continue to rise or if it will return to pre-fork levels.

For the moment, though, the launch of bitcoin cash doesn’t appear to be producing too much impact on the price of bitcoin. Since its launch, the number one digital currency has remained stable. This could be indicative of its growth and market value.

And yet, despite this, some are claiming that the fork could increase volatility and hurt wider adoption.

While the creation of bitcoin cash is designed to increase bitcoin’s transaction capability, Vinny Lingham, CEO of tech startup Civic, believes that it could damage bitcoin’s long-term prospects.

“My biggest concern with bitcoin being split at this point is just the brand dilution of bitcoin.”

He adds because there are two coins it may prove confusing to consumers. This may certainly be true for those who are just entering the digital space and don’t know which coin to use. This in turn could hinder wider adoption efforts.

Ryan Taylor, CEO of Dash Core, said that BCH has some issues:

First, Bitcoin Cash has not solved scaling. It has merely kicked the can down the road with slightly larger blocks, but still lacks a credible technology to scale to massively larger numbers of users. Second, Bitcoin will retain the network of integrated services that make the Bitcoin network useful to businesses and consumers. With no substantial enhancements compared with Bitcoin, Bitcoin Cash is unlikely to be integrated into those same services, given the substantial expense for businesses operating them to do so.

However, while there are people against the split, some are supportive of it.

Anatoliy Knyazev, co-founder of investment company Exante, said this is how digital currencies are supposed to work.

“(This is) decentralized governance in action. Anyone can try to lead and the market will figure it out.”

Many people who are able to access both BTC and BCH may be holding on to the new coins. They may be doing this until they can dump them when their value increases. As a result, experts are saying that traders should hold on to them.

Meanwhile, according to Erik Vooheers, CEO of ShapeShift, he took to Twitter to say he will be dumping his.

In his opinion the SegWit proposal has ‘overwhelming support’ and he will be standing by his support of it. This is true.

At the last check, support for SegWit remains at 100 percent from the mining community. SegWit2x has a support rating of 89.9 percent. Bitcoin Unlimited (BU), another proposal for the bitcoin upgrade, is trailing significantly behind with 35.5 percent support. At this stage it’s unlikely that BU will come to fruition.

For now, all the community can do is wait and see what happens.

Featured image from Shutterstock.

Survey: 97% of Indian Traders Are Aware of Bitcoin, but Use Remains Low

A new survey has been released by India’s market and trade body that shows while 97 percent of Indian traders are aware of bitcoin, it’s use among them remains low.

At a meeting called ‘Roundtable on Industry Perspective on Bitcoins: A New World of Payments and Deals,’ the PHD Chamber of Commerce and Industry, which overseas India’s industrial development, asked over 200 participants from a range of industries if they were aware of the digital currency. These included traders from electronic devices, fabrics and automobile parts industries. The objective was to see what impact bitcoin was having on companies within India.

According to the findings, though, while 97 percent of Indian traders are aware of the digital currency, its use within their services remains low.

In a report from News 18, Gopal Jiwarajka, President of the PHD Chamber of Commerce and Industry, said:

“Absence of the information about counterparties in the bitcoins transaction is a major drawback and may lead to unintentional transactions such as money laundering.”

He added that the use of bitcoin brings with it huge risks and that it is only the demand for it that is seeing increased optimism.

Bitcoin Gains Popularity in India

News of this will no doubt surprise many. Only recently a professor of finance at New York University said that digital currencies such as bitcoin were replacing gold among the younger generation in India.

Aswath Damodaran, who is known as the ‘dean of valuation,’ said that when people no longer trusted paper currencies they typically turned to gold, but now:

“Cryptocurrencies have taken the role of gold at least for younger investors because they don’t trust paper currencies.”

With many of India’s nation losing confidence in its currency a rising number of the country’s citizens have been turning their attention to bitcoin. This is particularly the case among the 18-35 age group.

This may be down to the fact that last November India’s prime minister Narendra Modi removed 86 percent of the nation’s currency overnight. With many of the population left in the lurch a significant rise in bitcoin trading was experienced.

Bitcoin Regulation in India?

At the moment the discussion of regulating bitcoin in the country is undergoing.

In the past there have been calls from Indian politicians to declare bitcoin illegal. According to Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, he has considers bitcoin as a pyramid-ponzi scheme and has termed it as such in the past.

However, it’s unlikely that the digital currency will be declared illegal in the country after the Indian government set up an interdisciplinary committee to look into the risks associated with bitcoin.

Of course, one of the issues with the digital currencies regulatory regime, is who will oversee it.

According to an official:

“Discussions till now suggest that bitcoin will most likely fall under the ambit of the RBI [Reserve Bank of India]. But some are of the opinion that bitcoin is a security rather than a currency and should be regulated by SEBI [Securities and Exchanges Board of India].”

Only recently it was reported that the Indian government was considering putting a ‘goods-and-services tax‘ on bitcoin purchases in light of the regulatory discussion.

India certainly has a wide reaching market that can benefit from the use of digital currencies, particularly considering that India has one of the fastest growing smartphone markets in the world. It, therefore, remains to be seen what the government will decide who will oversee its regulation.

Yet, with a young market that can help boost the adoption of the digital currency, it may be surprising to many to learn that its use still remains low within many industries.

Japan Embraces Bitcoin

Unlike India, Japan has taken the step of legalising the digital currency so that it can be used as a form of payment for goods and services. So much so, that by the end of 2017, it’s expected that there will be 300,000 stores accepting the currency as a form of payment.

Low-cost Japanese airline Peach Aviation Ltd., announced earlier this year that it would start accepting the digital currency as a form of payment for flight purchases.

According to the CEO of the company, it is hoped that by accepting bitcoin for flights it will attract tourists to the country after a rapid growth of the currency in Japan.

Shinichi Inoue said:

“We want to encourage visitors from overseas and the revitalization of Japan’s regions. This is a real first step in partnerships for Japan and we are aiming for more company and service tie-ups.”

Such a move has helped push the country and the cryptocurrency forward as its real world value becomes more prevalent.

Even though India doesn’t appear likely to term it as a currency like Japan has, it still marks a significant step forward for the country. It also highlights India’s interest in pushing for a digital economy, which finance minister Arun Jaitley has been pushing for since the country’s demonetisation last November.

Keeping Tabs on Bitcoin

With rising interest in the digital currency being witnessed in India, officials are keen to ensure that the public aren’t taken advantage of from companies that deal with bitcoin.

So much so, that the Ministry of Corporate Affairs (MCA) informed the Serious Fraud Investigation Office (SFIO), regional directors and the Registrar of Companies to collect information on the firms that are involved in bitcoin.

The instructions sent were issued to see:

“[I]f the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds.”

It’s hoped that by doing so they can keep on top of any potential risks they may need to take care of. Bitcoin may not be banned in India, but the fact that it’s not regulated can pose a risk to people who don’t fully understand what it is.

It remains to be seen whether more traders will start using the digital currency in their services once it has been regulated.

Featured image from Shutterstock.

Russian Airline Uses the Ethereum Blockchain for Flight Tickets

Russian airline S7 has revealed that it is now utilising the ethereum blockchain to sell flight tickets with backing from the country’s largest private bank.

Reported in regional newspaper Kommersant, Russian airline PJSC Siberia Airlines, known as S7, and Alfa-Bank started using the blockchain to sell flight tickets on Monday 24th July. The report states that one of the key benefits was faster settlements.

However, this is not the first time that S7 has experimented with the blockchain. In December, the airline undertook the first-of-its-kind payment service with the ethereum blockchain smart contracts through a letter of credit with Alfa-Bank.

Services giant Deloitte, who acted as the advisory consultant to the airline, said in a statement that:

“Legally, this transaction meets all the requirements for a letter of credit as a form of bank settlement, and demonstrates the potential of smart contract application in the framework of Russian legislation.”

Aeroflot, Russia’s largest airline, is also conducting research into the technology, namely digital currencies and how they can be used for flight ticket payments.

The experiments with S7 and Aeroflot are expected to end the 10th December, 2017.

Airlines Turn to Bitcoin

S7 is not the first airline carrier to embrace this innovative technology. There have been several airlines to do so before.

The most recent is low-cost Japanese airline Peach Aviation Ltd., which announced earlier in 2017 that it was to start accepting bitcoin as a form of payment for flight tickets. After the recent interest in the digital currency, which has seen rapid growth in Japan in recent months, it is hoped this will provide an attraction to tourists to visit the country.

Shinichi Inoue, chief executive officer of Peach, said:

“We want to encourage visitors from overseas and the revitalization of Japan’s regions. This is a real first step in partnerships for Japan and we are aiming for more company and service tie-ups.”

The heightened interest in bitcoin in Japan is due to the fact that in April regulations were changed which now see the digital currency as a legal form of payment for goods and services.

As a result, it’s expected that by the end of 2017 there will be as many as 300,000 stores in Japan accepting bitcoin for payments.

Aside from Peach other airlines have also embraced the most popular digital currency for their services too.

These include Latvian airline airBaltic, LOT, the Polish airline and Washington D.C.-based airline Universal Air Travel Plan (UATP).

Three years ago, airBaltic revealed that it was to begin accepting bitcoin payments in an attempt to focus more on the customer. By taking this step the airline became the world’s first to accept the digital currency for its tickets to 60 destinations in Europe, the Middle East, Russia and the Commonwealth of Independent States (CIS).

In 2015, LOT announced that it was going to start accepting bitcoin for its flights to over 60 destinations as well.

UATP also revealed in 2015 that it had joined up with Bitnet as a payment processing partner. As a result, the U.S. airline now has the opportunity of providing its network of over 260 airlines the option of accepting bitcoin for flight payments.

These are just a few of the airline carriers which are embracing the digital currency who see the benefits it can provide to customers. This is in contrast to Morgan Stanley’s claim that bitcoin acceptance among top merchants is in decline.

Russia and Bitcoin

While Russia appears to see many benefits with the blockchain – after all, ethereum’s founder, Vitalik Buterin, is reported to have met with Russian President Vladimir Putin – the country is still sitting on the fence when it comes to bitcoin.

However, its current stance is somewhat different from where it lay in 2016. Last year, a new amendment to the Criminal Code by the Ministry of Finance in Russia saw the regulator proposing a seven-year prison sentence for management and executives of banks and financial services firms for the use of bitcoin. The sentence was less for everyday people caught using it at four years.

Fast-forward to 2017 and the country has shifted gears after the central bank’s governor revealed that the authority is ‘analyzing’ the possibility of regulating the digital currency.

Yet, Elvira Nabiullina, governor of the Russian Central Bank, stated that she views bitcoin as a ‘digital asset’ instead of a currency.

She said:

“We don’t consider that bitcoin can be considered as a virtual currency. It’s more digital assets with the regulation of assets.”

She also claimed that there were some doubts as to what benefits the digital currency could bring to the economy.

While it’s not clear as to what Russia’s next move will be, in an April Bloomberg report Deputy Finance Minister Alexey Moiseev said that the Russian authorities hope to regulate digital currencies such as bitcoin by 2018 as they undertake steps to enforce rules against illegal transfers.

This will no doubt help bump the price of the digital currency up while also increasing its user base in the currency.

Bitcoin’s Price Slumps

As of the 26th July, the price of bitcoin has dropped to $2,490 with the total market cap of all currencies down to just under $85 billion, according to CoinMarketCap. In a 24-hour period, the price of bitcoin dropped by 2.14 percent while the market cap has yet to climb back up to $90 billion.

It’s thought that this recent slump is down to caution among investors in light of the potential Bitcoin Cash (BCC) hard fork that is expected on the 1st August.

With many people in the bitcoin community not happy with the SegWit2x solution to scaling issues, proponents are venturing to create their own coin, called Bitcoin Cash. Roger Ver, a self-described bitcoin evangelist and a supporter of Bitcoin Unlimited (BU), was reported as saying that a coin split would be ‘a good thing.’

Now supporting Bitcoin Cash, Ver claims that projects such as Omni and Counterparty would choose Bitcoin Cash.

Yet, while SegWit2x is gathering support, one person said that if SegWit2x didn’t activate a lot of people would lose their faith in the currency:

“Not because I have any particular support for 2X or any particular problem for Segwit, but because it shows fickleness and underhand moves based on politics not sensible technical decisions.”

Featured image from Flickr via Takashi Nakajima.

Egyptian Central Bank Deputy Governor Rejects Bitcoin Adoption Rumour

The deputy governor of Egypt’s central bank has rejected claims that bitcoin adoption will take place at the country’s banks.

In a statement posted on Arabian news site Amwal Al Ghad, Lobna Helal, the Central Bank of Egypt’s (CBE) deputy governor, denied reports that the bank was permitting banks to handle bitcoin adoption.

In a statement, she said:

“For stability of the Egyptian banking system, the banks deal with the official currencies only, and never deal with any virtual currencies.”

Similar comments also came from Gamal Negm, another deputy governor and director of the CBE, who flatly refused the rumour that the CBE was going to accept bitcoin.

According to a report, the rumours circulating the central bank’s bitcoin adoption stemmed from social media around the 16th and 17th June. However, any such possibility was quickly denied by officials at the bank.

These comments come at a time when several jurisdictions around the world are contemplating how to classify the digital currency and whether it should be regulated.

Bitcoin Adoption

Japan is quite possibly becoming widely considered a forward-thinking country when it comes to the adoption of bitcoin.

In April, the country changed its payment regulations, which now sees the digital currency as a legal form of payment for goods and services. As a result of this attitude change to bitcoin it’s believed that by the end of 2017 there will be around 300,000 stores accepting it as a form of payment.

Considering the negative experience the country has had with bitcoin in the past, with the now-defunct digital currency exchange Mt Gox, the country’s interest in the market has been reawakened. As a result, this new influx of Japanese traders has helped to push the price of the currency up in the past. In June, the price of bitcoin soared past the $3,000 for the first time.

Low cost Japanese airline Peach Aviation Ltd., is just one such company that is due to start adopting bitcoin by the end of the year. It is hoped that the rapid appreciation that the digital currency has been experiencing lately in Japan will attract tourists to the country.

Russia too is another country that should be given due credit to its position with bitcoin adoption. In the past the Russian government has been against the acceptance of the digital currency.

So much so that last March, management and executives of banks and financial services firms who were found to be using bitcoin faced a seven-year prison sentence. Whereas everyday individuals caught trading it faced a sentence of at least four years. Now, though, the country has eased its stance on digital currencies such as bitcoin and while it is exploring the possibility of regulating it, it’s not sure whether to class it as a currency or an asset.

At the beginning of February, the Philippines released new guidelines for bitcoin exchanges operating in the country. The move by the Bangko Sentral ng Pilipinas (BSP) essentially signals the recognition and legalisation of bitcoin activity within the country.

Also noteworthy is India, which is one country that is currently debating how bitcoin should be regulated. While the digital currency is unlikely to be banned in the country, the question as to who will oversee its regulation remains unanswered. However, given the fact that the adoption of bitcoin is widely used among a large percentage of 18-35-year-olds, it remains to be seen what impact regulation will have on the population who remain supportive of it. If, and when, it becomes regulated it could help propel the currency to a population of 1.3 billion people that is home to the fastest growing smartphone market in the world.

Bitcoin’s Value Slumps

The first half of 2017 has seen a rapid appreciation of bitcoin. At the beginning of the year its value was trading at $1,000, but by the beginning of June it has soared to over $3,000.

With an increase in the number of traders investing in the digital currency around the world claims were circulating that it couldn’t sustain its pace, was in a bubble and was likely to burst with rapid downfalls.

Seven months into 2017 and the price of bitcoin is trading at $2,311 on the 18th July, according to CoinDesk’s Bitcoin Price Index (BPI). Many would say that the price of the currency has certainly burst. Not only that, but it was recently trading below $2,000 for the first time in a 49-day low on the 15th July. As a result, the market cap value of all digital currencies dropped to nearly $70 billion. The highest it has achieved is $115 billion, which it achieved in June.

However, while bitcoin’s value had dropped significantly from its June record, digital currencies across the board have also slumped. As a result, many are claiming that what the community is witnessing is not a bubble, but the result of a looming deadline which could solve bitcoin’s scaling issues.

Meanwhile Andreas Antonopoulos, author of ‘Mastering Bitcoin,’ said recently on social media, that the decline in the price of the digital currency market was due to a price correction given the fact that it has seen a 1500 percent rise in two years, particularly in the last three months.

The Community Watches and Waits

With the 1st August deadline looming, all the bitcoin network can do is wait and see what impact the upcoming activation of SegWit2x will produce on it.

It is hoped that this solution will answer the needs of the community who have often faced a backlog of transactions as they wait to join the blockchain.

Even though miners were expected to start signalling for the proposed solution until later in July, some miners have already signalled their support for it in an advanced move. According to a report from CoinDesk, around 43 percent of bitcoin’s mining power has signalled for the change. These include the likes of Antpool, BTC.com, BitClub and BitFury.

While it may be a surprise it is likely due to the need to upgrade the network protocol before the 1st August deadline.

Featured image from Flickr via Dennis Jarvis.

Indian Government May Put Tax on Bitcoin Purchases, Say Reports

The Indian government is considering whether to introduce a goods-and-services tax on bitcoin purchases, according to local reports.

According to The Hindu, the government is thinking about implementing a regulatory regime for digital currencies such as bitcoin which would enable a tax levy.

At the moment in India digital currencies are neither legal or illegal; however, the uncertainty over its existence and how it should be treated is left floating in a grey area. If such a regulatory regime is introduced, trading may fall under the oversight of the stock market regulator, the Securities and Exchange Board of India (SEBI).

For months officials in India have been meeting to determine the fate of bitcoin and how it should be classified. Many opponents of the digital currency have called for it to be banned.

Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, raised the issue in April declaring that bitcoin should be declared illegal.

Whereas the Reserve Bank of India issued a statement on its position with the digital currency saying that users of the currency should take responsibility for any risks they encounter.

It said:

“The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with virtual currencies will be doing so at their own risk.”

However, because of the perceived risk of trading with bitcoin the government is maintaining a close eye on companies that deal with the digital currency to ensure that traders aren’t being taken advantage of. As a result, the Ministry of Corporate Affairs (MCA) informed the Serious Fraud Investigation Office (SFIO), regional directors and the Registrar of Companies to collect information on the firms that are involved in bitcoin.

The instructions sent were issued to see:

“[I]f the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds.”

Legal Framework for Bitcoin

In April, the Indian government set up an interdisciplinary committee designed to look into the existing legal frameworks regarding digital currencies which have been a ‘cause for concern.’

It was reported that the committee would submit their report on their findings some time in July; however, it was believed that an outright ban on bitcoin would be unlikely.

Now, according to The Hindu, it looks as those new details are emerging regarding the currency’s fate, which includes the possibility of implementing taxes.

A senior government official said:

“The discussion on whether cryptocurrencies should be banned or regulated has been on for some time. The pros and cons for both aspects were put forth in the meeting chaired by Finance Minister Arun Jaitley last month.”

Yet, while a proposal to ban bitcoin was also addressed at the meeting, it’s reported that there were few takers of the idea.

In the past Jaitley has pushed and promoted a digital agenda to limit the use of the country’s national currency.

Seeking comments from the public on whether bitcoin should be banned, regulated or subject to self-regulation were also undertaken. The results of which the government found that 80 percent of the public are supportive toward digital currencies, prompting the intergovernmental committee to look at several options regarding the legality of bitcoin.

In response, another official said:

“Banning will give a clear message that all related activities are illegal and will disincetivise those interested in taking speculative risks, but it was pointed out it will impede tax collection on gains made in such activities and that regulating the currency instead would signal a boost to blockchain technology, encourage the development of a supervision ecosystem (that tracks legal activities and may also assist in tracking illegal activities) and promote a formal tax base.”

Limited Regulation

At the meeting the idea of limiting regulation of the digital currency was also proposed. This would mean that bitcoin would not be recognised and that the trading of it would be at the risk of the individual involved, The Hindu said.

However, as the report states if the decision to regulate bitcoin was enforced it would be seen as a ‘digital asset, similar to gold,’ which would enable owners of the currency to trade them on registered exchanges.

Yet, the government appear weary of this approach and that such a measure could ultimately push the currency’s price up which, in turn, could produce an ‘investment bubble.’

There have been claims from various quarters that bitcoin is in a bubble and that its price will come back down again after experiencing record highs throughout the first half of 2017.

As of the 14th July, the price of bitcoin is trading at $2,215, according to CoinDesk’s Bitcoin Price Index (BPI), a significant drop from its June record of $3,000. Subsequently, its market value has dropped to $36 billion from over $40 billion.

Checking Bitcoin Transactions

Interestingly, the news of India’s progress on bitcoin’s legality comes at a time when the country’s Supreme Court has urged the RBI and the government to check digital currency transactions regarding money laundering and terrorism funding.

According to a report, the Supreme Court of India has given the RBI and the central government a four-week deadline ‘to examine all security related issues pertaining to virtual currency, including bitcoin.’

The report states that it was claimed that the RBI was failing to regulate transactions involving the digital currency and that it was alleged that the currency was being used to finance terrorist funding and money laundering.

Given the fact that bitcoin has gained prominence in India it will be interesting to see what impact this could have on the decision of whether to regulate the digital currency or not. It will also be interesting to determine what results the central bank and the government find to provide to the court.

A recent EU report found that digital currencies were being rarely used by criminals to finance terrorist funding and money laundering because the technology ‘requires knowledge and technical expertise which has a dissuasive effect.’

Featured image from Flickr via Suriaa.