Bitcoin falls below $30,000, lowest since July 2021

TOKYO - Bitcoin slumped below $30,000 for the first time since July 2021 on Tuesday as cryptocurrencies track sinking markets with investors spooked by aggressive US monetary tightening and surging inflation.

The world's largest cryptocurrency by market value fell as low as $29,764 in Tuesday trade, before recovering above $30,000, extending a recent collapse in price as investors desert assets viewed as risky.

Bitcoin's value has more than halved since a November surge that saw the token hit a record of nearly $69,000.

While crypto enthusiasts view bitcoin as a hedge against inflation, an influx of more traditional investors tend to view it as a riskier asset.

They have been offloading bitcoin and other digital tokens along with other volatile assets like tech stocks as the US Federal Reserve moves to hike interest rates to tackle decades-high inflation.

"Bitcoin is breaking below some key technical levels as the never-ending selloff on Wall Street continues," said Edward Moya, senior market analyst for the Americas at Oanda.

"The institutional investor is paying close attention to bitcoin as many who got in last year are now losing money on their investment," he added.While the token's "long-term fundamentals have not changed in months", concerns about growth and a possible recession are creating "a very difficult environment for cryptos", Moya said.

"No one is looking to buy the crypto dip just yet and that leaves bitcoin vulnerable here."

The slump in crypto follows dives on US equities and other markets, with the tech-rich Nasdaq closing down 4.3 percent on Monday, the S&P 500 declining 3.2 percent and the Dow ending off 2.0 percent.

Agence France-Presse

Bitcoin smashes through $50,000 as it wins more mainstream acceptance

LONDON - Bitcoin soared above $50,000 on Tuesday for the first time, adding steam to a rally fueled by signs that the world's biggest cryptocurrency is gaining acceptance among mainstream investors and companies.

Bitcoin hit a record $50,603 and was last up 0.83% at $48,351. It has risen around 67% so far this year, with most of the gains coming after electric carmaker Tesla said it had bought $1.5 billion in bitcoin.

The move by Tesla, which also said it would accept bitcoin as payment, was the latest in a string of large investments that have vaulted bitcoin from the fringes of finance to company balance sheets and Wall Street, with US firms and traditional money managers starting to buy the coin.

"The rally in bitcoin in part reflects the recent buoyancy of market confidence but also headlines suggesting an increase in corporate acceptability," said Jane Foley, head of FX Strategy at Rabobank.

Such mainstream moves, some investors said, could help bitcoin become a widespread means of payment - which it has so far failed to achieve at any large scale - and in turn bolster prices further.

"The more people that adopt it and use it as money, then the greater the chances of it perhaps being taken on board as a mainstream currency," said Russ Mould, investment director of AJ Bell. "That would feed further speculative interest."

The rush in 2021 by retail and institutional investors comes on top of a 300% rise last year as investors searched for high-yielding assets and alternatives to the dollar amid rock-bottom or even negative interest rates across the globe.

The meteoric rise of bitcoin, which traded at a few hundred dollars only five years earlier, has also led major investment banks to warn of a speculative bubble.

Bitcoin's rise "blows the doors off prior bubbles," BofA said last month.

Even as bitcoin enters the mainstream, cryptocurrencies remain subject to patchy oversight around the world, with the lack of regulatory clarity and associations with crime keeping many larger investors leery of exposure.

US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde both called last month for tighter oversight of bitcoin due to concerns over its use for criminal activities such as money laundering.

Some believe the extreme volatility is a cause for concern.

"We feel that, due to its volatility, bitcoin lacks many of the established qualities that make up 'money', such as being a stable store of value and unit of account," said George Lagarias, chief economist at Mazars.

DIGITAL GOLD?

Also boosting bitcoin's rise have been analyst suggestions that its limited supply of 21 million could boost further gains for the virtual asset.

A narrative of bitcoin becoming "digital gold" has gained traction as investors predict looming inflation with central banks and governments opening the stimulus taps to counter COVID-19.

St. Louis US Federal Reserve President James Bullard told CNBC in an interview on Tuesday that bitcoin's claim to be rival to gold would not threaten the dollar's dominance.

"Investors want a safe haven, they want a stable store value and then they want to conduct their investments in that currency," he said. "It's very hard to get a private currency - it's really more like gold - to play that role."

JPMorgan said in January that bitcoin emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.

"The fundamental view that bitcoin as a viable store of value amongst investors and as a treasury asset for corporations is continuing to gain traction," said James Butterfill, investment strategist at digital asset manager CoinShares.

US business intelligence software firm MicroStrategy Inc , whose CEO has become one of bitcoin's most visible proponents, on Tuesday said it would issue $600 million of debt through convertible notes to buy additional bitcoin.

Meanwhile, smaller cryptocurrency ethereum fell 2.42%, after earlier rising to $1,826, which was just shy of its record high price of $1,875.

With value of cryptocurrencies close to $1.5 trillion, some investors caution about the value in owning bitcoin or other cryptocurrencies.

"As an intangible asset with no yield or practical use, save for a few organizations who accept it as payment, it is really just demand (against a predictable supply) which determines its price," said Mazars' Lagarias.

"But whereas the price of bitcoin has risen to the skies, what value one gets from holding it in a long-term portfolio still remains subject of much debate."

-reuters-

After dizzying gyrations, what's bitcoin really worth?

LONDON - After the latest wild ride took the poster child of cryptocurrencies above $40,000 before a stomach-churning plunge, the million dollar question won't go away: how much is bitcoin actually worth?

The virtual currency barreled to new highs to rise more than 400 percent over the past year, before promptly sliding some 20 percent and then settling around $36,000.

When it started life in 2009 as open-source software, bitcoin was essentially worth zero -- though within a year it had reached the heady heights of eight cents.

At today's market rates, bloated by a surge in institutional demand, the digital unit's market capitalization is worth some $670 billion with myriad other crypto coins such as ethereum lifting the sector nominally close to the trillion mark.

Although that's small potatoes compared to the $68 trillion or so swilling around world stock markets, it is nonetheless the sort of financial territory staked out by Wall Street tech royalty such as Google, Apple or Tesla. 

One tech site, AssetDash.com, notes that bitcoin is currently worth around as much as Facebook and a little more than Chinese e-retail giant Alibaba.

CURSE OF THE FORGOTTEN PASSWORD

Although deep-pocketed investors have recently become enthusiasts, crypto was in its early days the preserve of geeky amateur investors.

It is the latter who have mainly suffered as an estimated four million of the roughly 19 million bitcoin units currently in circulation have been lost.

"Lost" does not mean the coins have fallen down the back of the sofa or through a hole in a trouser pocket: they have been electronically zapped from the record, often because their owner has forgotten a password to coins hoarded on a USB stick.

One US developer mislaid his password after storing 7,002 bitcoins on one such flash drive, forcing him to wave goodbye, on paper (or rather, the trading screen), to around $280 million.

This week, Welshman James Howells desperately offered his local authority a quarter of his fortune to dig up a landfill site where he believes a hard drive he accidentally tossed away -- and which has since soared in value to around $270 million -- is buried. The council refused, citing the cost and logistical restrictions. 

According to analysts at JP Morgan, bitcoin may be highly volatile but could go as high as $146,000 per unit, putting it in competition with gold as an asset class in terms of private sector investment.

That volatility, as well as the unregulated and decentralized nature of the bitcoin beast, are key reasons why many seasoned financial observers are scared off -- as well as the risk of "losing" their stash.

"Most of the lost bitcoins were acquired in the early days," said Philip Gradwell, economist with Chainalysis.

Gradwell said that around one in five bitcoins in circulation today have not budged from their location in five years -- since days when the unit was worth not much more than $100.

"One or two million of those belong to Satoshi himself," added Gradwell, referring to the creator of the coin, whose identity remains unknown.

He added that the bulk of investors are not day-to-day traders, but people making a long-term punt -- and he estimates that the spectacular price boom of recent weeks has involved only around five millions units.

Patrick Heusser, head of trading at Swiss trader Crypto Broker, said that following the trading volumes of a variety of cryptocurrencies, rather than just bitcoin, would give a better idea of how the market is faring.

"Ethereum has a lot of activity on the chain, but on the litecoin side there is almost nothing going on," said Heusser, with the former valued at some $138 billion currently, and the latter at $10 billion.

Heusser suggested the rises have been largely a bitcoin slipstream effect, and he cautioned against drawing parallels with gold.

"To be honest I don't believe that it is a very powerful or insightful metric inside what's going on in the crypto market," Heusser concluded.

After years of experience on traditional currency markets, he judged that it was early days for the crypto equivalent.

"We're still a small fish," he said.

Agence France-Presse

Libra partners reconsider as governments grumble: report

SAN FRANCISCO, United States - Mastercard, Visa and other financial partners being enlisted to oversee Facebook-backed cryptocurrency Libra are having second thoughts as regulators unleash ire on the project, according to a report Tuesday.

A Libra Association created by Facebook to independently manage the digital money still had its initial group of backers on Tuesday.

But a Wall Street Journal report said some of those on it were reconsidering their roles due to opposition expressed by governments digging for information about the project.

Visa referred AFP to comments made by chief executive Alfred Kelly in an interview in August with CNBC in which he said the company had signed a non-binding letter of intent with the association but was "not a member of anything."

Kelly went on to say Visa would not join the association if it isn't satisfied when it comes to complying with regulations.

The association, which is working on a charter that will outline involvement by founding members, declined to comment and Mastercard did not immediately respond to a query.

The head of the Libra Association said last week that the project's leaders aimed to "reassure" regulators worried about the virtual money. 

Bertrand Perez, director general of the Geneva-based non-profit association, said Libra will be backed by a basket of currency assets and short-term government bonds to avoid the wild swings seen with bitcoin and other cryptocurrencies.

Hashing out details

Facebook's plans for Libra have meet with concern by governments and critics of the social network behemoth, whose reputation has been tarnished by its role in spreading fake information and extremist videos.

Last month, France's economy and finance minister Bruno Le Maire warned that under current circumstances Libra posed a threat to the "monetary sovereignty" of governments and could not be authorized in Europe.

Officials have also raised concerns about how the currency would be regulated, particularly how it would comply with regulations about combatting money laundering and financing of terrorism. 

"We are carrying out a normal course of work with regulators to show them that, in terms of anti-money laundering, the (Libra) system will be at least equivalent to the conventional monetary system," Perez said.

Besides Facebook, backers of Libra include payment giants Visa, MasterCard and PayPal, as well as ride-hailing apps Lyft and Uber.

The Libra Association is set to expand, as over 100 companies and organizations have expressed an interest in joining, Perez said.

Facebook has promoted Libra as an opportunity to provide online commerce and financial services at minimal cost to more than a billion "unbanked" people -- adults without bank accounts or those who use services outside the banking system such as payday loans to make ends meet.

In leaked comments from a meeting of Facebook employees in July, Facebook chief executive Mark Zuckerberg said he remained optimistic for Libra despite harsh comments from public officials in several countries.

"The public things, I think, tend to be a little more dramatic," he said.

"But a bigger part of it is private engagement with regulators around the world, and those, I think, often, are more substantive and less dramatic... That's where a lot of the discussions and details get hashed out on things."

source: news.abs-cbn.com

Facebook's cryptocurrency faces privacy concerns, political backlash

SAN FRANCISCO/NEW YORK -- Facebook Inc announced ambitious plans on Tuesday to launch a new global cryptocurrency called Libra, part of an effort to expand into digital payments that immediately raised privacy concerns.

The social networking giant has linked with 28 partners including Mastercard, PayPal and Uber to form Libra Association, a Geneva-based entity governing the new digital coin, according to marketing materials and interviews with executives. No banks are yet part of the group.

To facilitate transactions, Facebook also created Calibra, a subsidiary that will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook messaging platforms Messenger and WhatsApp.

The whole system is scheduled to launch in the first half of 2020.

Facebook executives and others associated with Libra have big aspirations. They hope it will not only power transactions between established consumers and businesses globally, but offer unbanked consumers access to financial services for the first time.

Facebook is also betting Libra can squeeze more revenue out of its suite of apps, something already happening on Chinese social networks like WeChat.

Representative Maxine Waters, chairwoman of the US House Financial Services Committee, called for Facebook executives to testify before Congress and asked the company to halt development of Libra until lawmakers and regulators have reviewed the project. 

"With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users," Waters said in a statement.

Other regulators, lawmakers and government officials around the globe also quickly issued critical statements. France's finance minister said he had asked central bank heads from G7 countries to write a report on the project by mid-July.

A Facebook representative said the company looked forward to answering lawmakers' questions.

Before Tuesday's announcement, Facebook was already facing significant backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 US presidential election. Those issues have led some government officials to call for Facebook to incur penalties, or be forcibly broken up.

Kevin Weil, who runs product for the Libra initiative, said Facebook hoped to bring global regulators to the table by publicizing its plan.

"It gives us a basis to go and have productive conversations with regulators around the world," he told Reuters. "We're eager to do that."

The name "Libra" comes from Roman weight measurements, the astrological sign for justice and the French word for freedom, said David Marcus, who heads the project for Facebook.

"Freedom, justice and money, which is exactly what we're trying to do here," Marcus said in an interview.

Facebook shares closed up 0.1 percent.

UNREGULATED SECTOR

Facebook is using one of the least-regulated areas of finance for its foray into the sector.

Bitcoin, the best-known digital coin, was created in 2008 as an alternative to traditional currencies that are controlled by governments and central banks. Some countries have explored ways to regulate the market since then, but crypto trading remains largely unsupervised.

In the meantime, investors have lost hundreds of millions of dollars through steep price drops and crypto-exchange hacks. The market has also faced money-laundering and terrorist-financing allegations.

But Facebook's status as a Silicon Valley behemoth touching billions of people around the world could help legitimize what has so far been a niche and volatile market.

Other Libra Association members include companies like Visa , Spotify, eBay and Vodafone, as well as venture capital firms like Andreessen Horowitz.

They hope to have 100 members by Libra's launch. Each gets one vote on substantial decisions and firms must invest at least $10 million to join.

The group aims to raise money through a private placement in coming months. Facebook does not plan to maintain a leadership role after 2019.

Though there are no major banks among the inaugural members, there have been discussions with them, said Jorn Lambert, executive vice president for digital solutions at Mastercard.

Big lenders are waiting to see how regulators and consumers respond to the project before deciding whether to join, he said.

Some Libra backers acknowledged that consumer privacy brawls or regulatory resistance could hinder their lofty goals, and detailed some steps they are taking to preempt those issues.

For instance, Calibra plans to conduct compliance checks on customers who want to sign up, using verification and anti-fraud processes that are common among banks.

The subsidiary will only share customer data with Facebook or external parties if it has consent, or in "limited cases" where it is necessary, Facebook said. That could include for law enforcement, public safety or general system functionality.

Sri Shivananda, PayPal's chief technology officer, said the project was still in its "very, very early days" in terms of getting necessary regulatory approvals and consumer buy-in.

And, Mastercard's Lambert said that if the project receives too much pushback, "we might not launch."

source: news.abs-cbn.com

Bitcoin crashes to lowest this year, losses top 25 percent in a week

LONDON -- Bitcoin slumped on Tuesday to its lowest this year, tumbling as much as 10 percent to breach $4,300 and taking losses in the world's best-known digital coin to 25 percent within a week.

Other smaller coins also skidded sharply as a broader cryptocurrency sell-off, said by traders and market makers to be rooted in heavy selling at leveraged Asian exchanges, gathered steam.

The fall followed a sudden plunge last week that shook bitcoin out of a period of relative stability, where prices had hovered around the $6,500 mark for several months.

Bitcoin sunk as far as $4,327, its lowest since October 2017. By mid-afternoon, it was trading around $4,750 on the Bitstamp exchange.

"We'd been waiting for a break-out," said Mati Greenspan, senior market analyst at eToro. "When you have the price moving so steadily you had lots of stop-loss orders building up - and now you are seeing them being liquidated."

Ripple's XRP and Ethereum's ether, the second and third-largest coins, fell as much as 14 and 16 percent respectively before clawing back losses in US trading hours.

Tuesday's falls coincided with broader drops in financial markets. European shares fell as poor retail results and weakness in Apple Inc dragged down Wall Street.

Bitcoin has plummeted over 75 percent this year from a peak of $20,000 touched in December as retail investors piled into a one of the largest bubbles in history.

"CASINO MENTALITY"

Traders and market makers blamed bitcoin's slide on heavy selling at leveraged exchanges in Asia such as Hong Kong-based OKEx and Bitmex. Few exchanges in the West lend bitcoin to traders, making the Asian venues popular with speculators.

"The presence of leverage makes day traders attracted to Asian markets," said Michael Moro, CEO of Genesis Global Trading in New York, one of the biggest over-the-counter trading desks.

"Folks who are risking 100X type of leverage, it’s really difficult to think of that as an investment – it’s a casino mentality."

Others blamed fears that last week's "hard fork" in bitcoin cash, where a software upgrade split the fourth-biggest coin into 2 separate currencies, could destabilize others.

The price of bitcoin tends to be sensitive to debates over how its underlying network evolves. Last year the suspension of hard fork planned by major developers and investors proved a major catalyst to its breakneck rise.

TOUGH BILLING

Mainstream investors have stayed clear of bitcoin, with concerns over scant regulatory oversight and undeveloped market infrastructure compounded by frequent swings in price.

That lack of involvement has seen bitcoin struggle to live up to its billing as something that will revolutionize world finance. Its usage as a payment currency has shriveled this year.

At the same time, bitcoin's plunge in value has calmed the fears of regulators and central bankers that it could one day pose a risk to financial stability.

According to industry tracker Coinmarketcap.com, the total value of cryptocurrencies is now around $154 billion, down from a peak of around $800 billion in January.

Cryptocurrency advocates say bitcoin is still young and price volatility is to be expected. Many predict the need for virtual currencies that operate beyond mainstream banking will outlast any short-term price falls.

By late afternoon, XRP and ether were trading around $0.45 and $142 respectively on the Luxembourg-based Bitstamp exchange.

"The euphoria has died and prices have consolidated with lower lows and lower highs," said Fawad Razaqzada, an analyst at Forex.com. "A lot of people have lost interest."

source: news.abs-cbn.com

Bitcoin falls below $5,000 for first time since 2017

LONDON -- The value of bitcoin slipped Monday below $5,000 (4,366 euros) for the first time since October 2017 as a broad selloff gathered steam on the opaque cryptocurrency market.

Data compiled by the Coinbase digital exchange showed the world's most popular virtual currency losing 12.5 percent of its value from Friday evening to stand at $4,914.21 by 1930 GMT Monday (3 a.m. Tuesday in Manila).

The world's most popular virtual currency lost 12.5 percent of its value from Friday evening to stand at $4,914.21 by 1930 GMT Monday (3 a.m. Tuesday in Manila), according to data compiled by the Coinbase digital exchange.

The rout began on Wednesday and has also affected widely-traded other cryptocurrencies such as ethereum and ripple.

Bitcoin opened trading on Wednesday at $6,326 and has since seen its market capitalization fall to less than $90 million for the first time in over a year.

The still-nascent sector is not completely transparent and analysts have struggled to understand what precisely prompted the latest drop.

At least some of it has been attributed to a battle for control of a smaller crypto operator called bitcoin cash.

That currency has split in 2 -- a process traders describe as a "hard fork" -- and who owns it at the moment is not entirely clear.

Bitcoin cash was down around 20 percent on the day.

The confusion has highlighted what analysts have been warning for some years: crypto trading is too unregulated and risky to be considered a safe investment for the public at large.

'FOOL'S ERRAND'

Bitcoin has suffered a painful year of declines from its all-time high of $19,511 in December 2017.

Some of the currency's problems have been attributed to its business model.

Bitcoins are created through a process called computer "mining".

This essentially involves using massive banks of interconnected processors to solve complex math problems.

The computations get progressively harder to crack the more bitcoins there are on the market. The electricity costs involved grow as a result.

One market estimate made last month put the cost of mining one bitcoin at $7,000.

This means market players are currently creating new coins at a loss.

Traders had been hoping to get a big boost with the approval by the US Securities and Exchange Commission (SEC) of a bitcoin exchange-traded fund (ETF).

The investment instruments essentially operate as a stock that closely tracks each bitcoin's market value.

ETFs are one of the most popular trading mechanisms and the SEC's green light would give the bitcoin market a massive infusion of outside cash.

But the SEC has thus far balked out of concerns about fraud.

Some of the losses since Wednesday have also been linked to a warning from the accounting group KPMG last week about the dangers of viewing bitcoin as a real currency.

"To fulfill the requirements of 'store of value', cryptocurrencies must be much more stable," the KPMG report said.

"Extending credit in a currency that risks significant devaluation or borrowing if the value appreciated beyond the borrower’s ability to pay would be a fool’s errand," said the report.

source: news.abs-cbn.com

Mining bitcoin uses more energy than Denmark: study

PARIS -- Extracting a dollar's worth of cryptocurrency such as bitcoin from the deep Web consumes 3 times more energy than digging up a dollar's worth of gold, researchers said Monday.

There are now hundreds of virtual currencies and an unknown number of server farms around the world running around the clock to unearth them, more than half of them in China, according to a recent report from the University of Cambridge.

Mining virtual currencies with a real-world value, in other words, carries a hidden environmental cost that is rarely measured or taken into account.

"We now have an entirely new industry that is consuming more energy per year than many countries," said Max Krause, a researcher at the Oak Ridge Institute for Science and Education and lead author of a study in the journal Nature Sustainability.

"In 2018, bitcoin is on track to consume more energy than Denmark," he told AFP.

Denmark consumed 31.4 billion kilowatt hours in electricity in 2015. As of July 1 of this year, Bitcoin mining used up approximately 30.1 billion kilowatt hours, according to the study.

The highly competitive practice of mining cryptocurrencies requires hundreds, even tens of thousands, of linked computers running intensive calculations in search of the Internet equivalent of precious metals.

New coins are awarded to those who complete calculations first, with the transaction confirmed and entered into the currency's shared public ledger, known as the "blockchain".

The top 100 cryptocurrencies have a current market value of about $200 billion (175 billion euros), according to the website coinmarketcap.com.

Bitcoin accounts for more than half of that amount.

"We wanted to spread awareness about the potential environmental costs for mining cryptocurrencies," Krause said.

DIGITAL IS NOT COST-FREE

"Just because you are creating a digital product, that doesn't mean it does not consume a large amount of energy to make it."

The movies, music and videos that billions of people stream every day all have measurable environmental costs, earlier research has shown.

For the study, Krause and Thabet Tolaymat, an environmental engineer based in Cincinnati, Ohio, calculated the average energy consumed to create one US dollar's worth of four top virtual currencies -- bitcoin, ethereum, litecoin and monero -- over the 30-month period up to June 2018.

That amount was 17, 7, 7 and 14 million joules, or megajoules (MJ), respectively.

A joule is a unit of energy equivalent to the work required to produce one watt of power for one second.

That is up to three times the energy needed to excavate gold, platinum or copper, they found. Of the metals examined, only aluminium -- at 122 MJ per dollar's worth -- was more energy intensive.

A complete calculation of the environmental cost of virtual currencies would take into account the banks of computers used to mine them.

"The computers are made with gold and other precious metals," said Krause.

"They are run aggressively, which means the hardware is destroyed much quicker than you or I would expect for regular use -- maybe a year instead of five or ten."

source: news.abs-cbn.com

Cryptocurrency exchanges at risk of manipulation: US report

NEW YORK -- Several cryptocurrency exchanges are plagued by poor market surveillance, pervasive conflicts of interest and lack sufficient customer protections, the New York Attorney General's office said in a report published on Tuesday.

The study found that online platforms where virtual currencies such as bitcoin can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.

"As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges," Attorney General Barbara Underwood said in a statement.

As a result of the findings, the attorney general asked New York's Department of Financial Services (NYDFS) to review whether 3 exchanges might be operating unlawfully in the state.

The attorney general's office launched its Virtual Markets Integrity Initiative in April 2018, asking 13 platforms to voluntarily share information about their practices.

Four platforms did not participate, claiming they did not allow trades from within New York State. The Attorney General's office investigated whether the platforms did operate in the state, and has referred three - Binance, Kraken and Gate.io - to NYDFS. The 3 platforms could not immediately be reached for comment.

US and international regulators have begun clamping down on malpractices in the cryptocurrency market over the past year as trading in the nascent asset class boomed.

Two Wall Street regulators last week announced a series of actions, including levying fines, against companies involved with cryptocurrencies, while a New York federal judge ruled a case could proceed in which US securities law was being used to prosecute fraud cases involving cryptocurrency offerings.

The attorney general's report detailed how some of these platforms conduct overlapping lines of business that present "serious conflicts of interest," including trading for their own account on their own venues. Some platforms also issue their own virtual currencies or charge companies to list their tokens.

The study also found that "trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession," making it "difficult or impossible" to confirm that the exchanges are responsibly holding customer accounts.

Although some platforms police their markets for trading abuses, others do not, the report found.

"Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns," the report said.

source: news.abs-cbn.com

New York investigates cryptocurrency trading exchanges

New York state authorities on Tuesday said they have launched a probe into platforms that trade cryptocurrencies like bitcoin, including potential fraud and conflicts of interest.

The latest inquiry aims to increase "transparency and accountability" of the exchanges that retail investors rely on to trade virtual currency, New York Attorney General Eric T. Schneiderman said in a statement.

He said "too often, consumers don't have the basic facts they need to assess the fairness, integrity, and security of these trading platforms."

Citing reports of theft of vast sums of virtual currency from customer accounts, and sudden and poorly explained trading outages, the Attorney General's office sent letters to 13 major trading platforms requesting key information on their operations, internal controls, and safeguards to protect customer assets.

The questionnaires ask about steps to combat suspicious trading and market manipulation; policies on the operation of bots; and the safeguards in place to protect customer funds from theft, fraud, and other risks, the statement said.

The exchanges questioned include Coinbase, Gemini Trust, Bitfinex and Kraken.

U.S. and international regulators have increasingly expressed concern about the need to beef up oversight as use of virtual currencies has grown quickly.

Bitcoin and other digital currencies have seen demand soar although the value has declined from the peaks, accompanied by a rise in questionable investment scams that authorities have shut down.

SEC Chairman Jay Clayton said recently that electronic trading platforms for virtual currencies that often have a "deceiving" appearance, fooling some into thinking they have the same protections as traditional stock markets.

And Agustin Carstens, general manager of the Bank for International Settlements, has called for regulators to act preemptively, arguing that bitcoin and others fail the "basic textbook definitions" of currencies -- which are backed by governments and their central banks.

Instead it "has become a combination of a bubble, a Ponzi scheme and an environmental disaster."

source: news.abs-cbn.com

Twitter bans cryptocurrency ads on fraud fears

Twitter on Monday announced a ban on ads for initial offerings of cryptocurrency or sales of virtual currency tokens, sending the value of bitcoin diving below $8,000.

Twitter followed the lead of Google and Facebook, which earlier this year cracked down on digital currency ads to protect users from being duped.

"We are committed to ensuring the safety of the Twitter community," Twitter said in a statement.

"As such, we have added a new policy for Twitter Ads relating to cryptocurrency."

Under the new policy, the advertisement of ICOs, or initial currency offerings, and token sales will be prohibited at the global one-to-many messaging platform.

Some startups have used ICOs to raise billions of dollars in a highly volatile, unregulated market.

Twitter said: "We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner."

The value of bitcoin dropped eight percent to $7,929 after the Twitter ad ban was announced, according to market data from Bloomberg.

The new policy leaves open the door for ads for cryptocurrency exchanges or secure "wallet" services offered by public companies listed on some major exchanges.

Twitter plans to modify its ad policy as the digital currency market evolves and its ability to distinguish dubious marketing messages improves.

The British government early this year called for global regulation of controversial virtual currency bitcoin, adding that the G20 would address the topic this month.

Bitcoin is independent of governments and banks and uses blockchain technology, where encrypted digital coins are created by supercomputers.

The virtual currency is not regulated by any central bank but is instead overseen by a community of users who try to guard against counterfeiting.

Virtual currency exchanges have seen tremendous volatility, and have sparked concerns they can be used to launder money for criminal networks.

The value of Litecoin also tanked on Monday, after the Singapore-based nonprofit Litecoin foundation put out word that payments processor LitePay ceased operations.

LitePay had asked the foundation for more funding, but was "unable to provide a satisfactory picture" of what it did with the money it had already been given, according to a release.

"We are greatly disheartened that this saga has ended in this way and we apologize for not doing enough due diligence that could have uncovered some of these issues earlier," Litecoin foundation said in the release.

"We are currently working hard to tighten our due diligence practices and ensure that this does not happen again."

Litecoin was down about 10 percent to $144.05 as of mid-day.

gc/wd

source: news.abs-cbn.com

Different approaches to bitcoin in Asia

TOKYO - From clampdowns to a warm embrace, regulators in Asia have taken very different approaches to dealing with the bitcoin phenomenon. Here are the developments in a few key markets:

CHINESE CLAMPDOWN 

In mid-September, China's central bank, the People's Bank of China (PBOC), told virtual currency trading platforms based in Beijing and Shanghai to cease market operations.

Authorities also clamped down on ethereum and any other electronic units that are exchanged online without being regulated by any country.

The PBOC said it wanted to fight "speculation" around the crypto-currencies, which "seriously disrupted the financial system".

This came after the National Internet Finance Association of China -- an offshoot of the PBOC -- drew up a damning report on virtual currencies, saying they were "increasingly used as a tool in criminal activities" such as drug trafficking.

Experts say Chinese authorities are also concerned about possible capital flight which could harm the value of the yuan.

However, the authorities in Beijing have not yet attacked bitcoin mining -- the creation of the digital currency.

Between 60 and 70 percent of new bitcoins are created in China.

KOREAN CONCERN 

Hyper-wired South Korea was also a hotbed for virtual currencies such as bitcoin, accounting for some 20 percent of global transactions, about 10 times its share of the world economy.

But South Korean authorities late last year banned financial institutions from dealing in virtual currencies on fears of a bubble fuelled by retail speculators.

About one million South Koreans, many of them small-time investors, are estimated to own bitcoins and demand is so high that prices are around 20 percent higher than in the US.

Initial coin offerings (ICOs) -- where companies sell newly mined cryptocurrencies to investors for real money -- were also outlawed.

The government has also pledged to strengthen investor protection rules, in an effort to curb speculation and potential fraud.

Announcing the ban on ICOs in September, South Korea's Financial Services Commission declared "cryptocurrencies are neither money nor currency nor financial products".

Youbit, a South Korean exchange trading bitcoin and other virtual currencies, declared itself bankrupt in December after being hacked for the second time this year.

North Korea was accused of being behind the first attack.

SINGAPORE CAUTION 

Singapore's central bank has issued a warning over cryptocurrencies, cautioning the public about the risk of jumping in on the "bitcoin bubble".

The Monetary Authority of Singapore noted they are not backed by any central bank and are unregulated, which means those who lose their investments have no grounds for redress under Singapore law.

Yusho Liu, co-founder of Singapore-based cryptocurrency wallet Coinhako, says demand has been soaring, with transactions up around 10-fold over the past year.

However, while regulators have been prepared to offer a cautious free rein to the digital units, "financial institutions and service providers have been rather resistant", Liu told AFP.

"In fact, I believe that only 30-40 percent of the market potential is fulfilled because of the friction generated by such matters. This is the key missing piece of Singapore being the fintech hub," said Liu.

JAPANESE JUMP-IN 

The high-profile collapse of digital currency exchange platform MtGox failed to douse the enthusiasm for virtual currencies in Japan, which in April became the first country in the world to proclaim it as legal tender.

As many as 10,000 businesses in Japan are thought to accept bitcoin and bitFlyer, the country's main bitcoin exchange, saw its user base pass the one-million mark in November.

Many Japanese, especially younger investors, have been seduced by the idea of strong profits in the context of ultra-low interest rates that offer little in the way of returns.

However, the governor of the Bank of Japan, Haruhiko Kuroda, has recently issued a warning that the recent rise of the bitcoin price was "abnormal".

source: news.abs-cbn.com

Bitcoin: Big in Japan

TOKYO - Known as "Miss Bitcoin" on Japanese social media, Mai Fujimoto says she invests all of her savings in the virtual currency that has proved a huge hit in Japan.

"I convert all my disposable income into cryptocurrency," the 32-year-old tells AFP. "I've been doing this for nearly a year now. I convert all my savings into cryptocurrency instead of putting them in a bank."

She is not alone in her enthusiasm.

Bitcoin is recognised as legal tender in the world's third-biggest economy and nearly one third of global bitcoin transactions in December were denominated in yen, according to specialised website jpbitcoin.com.

This has led to many analysts speculating that the famous Mrs Watanabe -- shorthand for Japanese individual foreign exchange investors -- is behind the recent volatile frenzy that pushed the price of bitcoin up to nearly $20,000 before dropping back.

But why Japan?

Firstly, unlike regional rivals China and South Korea, whose regulators have clamped down hard on the crypto-currency, Japan has welcomed it with open arms.

In April, Japan passed a law recognising bitcoin and other virtual currencies as legal tender -- while also stressing the need for transparency and financial stability.

And there is little doubt that Japan's global weight grew after China closed down bitcoin trading platforms last year.

ULTRA-LOW RATES 

Some well-known Japanese businesses have started accepting payment in bitcoin and one firm made waves when it said it would pay part of its employees' salaries in the currency if they wish.

"The involvement of big companies, the sense of security derived from government approval and media exposure really brought in a whole new group of people to the market," said Koji Higashi, a well-known commentator on the crypto-business in Japan.

Another factor contributing to a bitcoin boom in Japan: ultra-low interest rates from the deflation-battling central bank that has left investors scratching their heads for places to find returns on their cash.

While Japanese are generally considered risk-averse investors, they are also well-versed in the complexities of market trading, especially in foreign exchange.

A lot of ordinary Japanese people are trading "high levels" of money on the foreign exchange markets, said Yuzo Kano, founder and chief executive of bitFlyer, Japan's main bitcoin trading platform.

A lot of these stay-at-home FX day traders -- the mythical Mrs Watanabe -- are now turning their hand to bitcoin, noted analysts from Deutsche Bank in a recent report.

Analyst Higashi, on the other hand, thinks that the blanket domestic and international media coverage of the rise of bitcoin has prompted many Japanese to join the party.

"'Everyone else is doing it now and I heard they are making a lot of money. I have to get on it now.' That's a very Japanese way of thinking," he told AFP.

"To be honest, I am not sure if people are buying into bitcoin based on rational decision-making. It feels more of a short-term irrational mania to me," he added.

NOT ALL PLAIN SAILING 

Whatever the reason, "Miss Bitcoin" has been a convert since 2012.

"At the time, I was working with children and creating an online donation platform. And for the first time, I learned how expensive it is to send money abroad," Fujimoto recalled.

"So, I was really impressed when I heard that I don't have to go through banks if I use bitcoin payment," added the businesswoman.

She snapped up her first bitcoin for 1,200 yen ($10) in 2012. On Sunday it was trading at $16,726.

But the cryptocurrency mania has not been all plain sailing in Japan.

In 2014, Tokyo-based exchange platform MtGox filed for bankruptcy, with French CEO Mark Karpeles saying it had lost nearly half a billion dollars' worth of the digital currency in a possible theft.

And another factor may end up cooling the enthusiasm of individual investors -- profits made from bitcoin trading are considered as "miscellaneous income" and subject to a higher tax rate of 55 percent.

"Now, a lot of traders are struggling to calculate the amount to be taxed and I think there will be a lot of tax evasion scandals in the near future," said Higashi.

source: news.abs-cbn.com

'Virtual gold' may glitter, but mining it can be really dirty

As the poster child for the growing ranks of computer-generated currencies, bitcoin's recent stratospheric price rises have propelled it from the chat forum-hosted depths of nerddom into the global consciousness.

As it rose from under $1,000 to over $19,500 at one point this year, hordes of tech-savvy punters have rushed in to buy, while any investors can now do the same on the US futures markets.

Bitcoin has been called virtual gold, in part because it is created in a process that insiders call mining. And like real mining, it can be dirty.

That's because joining the online gold rush to mine the coins that are streams of computer code requires high-powered rigs that consume considerable amounts of electricity to do the virtual equivalent of blasting through rock by solving a string of highly complex computer algorithms.

Depending on how the electricity used for mining is generated, the virtual currency can have a very real impact by adding pollutants into the air and contributing to global warming.

Out of the bedroom

What barely five years ago was a hobby for "bedroom miners" has mushroomed into a massive, but unregulated, industry that some observers fear is a bubble waiting to explode, potentially causing damage similar to the sub-prime mortgages fiasco that caused the global economic crisis a decade ago.

Mining involves "adding value by dedicating computational resources to verify transactions in a huge public ledger called a 'blockchain'," explained Julian Oliver, a New Zealander who uses wind power to mine ZCash -- a bitcoin cousin.

The miners are thus providing the computer resources for their currency's trading system to operate.

But the number-crunching to pocket coins requires ever more powerful hardware and the means to keep them running, Oliver told AFP.

"At current bitcoin prices things are looking good for miners," he said. "But it's a huge use of energy, whatever the profit margins (and is) not remotely sustainable."

Specialist studies estimate the total annual energy output of the hundreds of thousands of dedicated mining machines worldwide at 35 terawatt hours, according to the Digiconomist website -- some 25 percent up on last year.

That puts it on the level of energy consumption of Denmark.

Each transaction consumes roughly 100 kWh -- the equivalent of running a lightbulb for three months. By contrast, a credit card transaction uses about 0.2 kWh.

But focusing on the electricity consumption of cryptocurrency mining "ought not to overshadow pre-existing environmental costs of the traditional financial system," said Oliver, as "cash needs to be printed and transported and banks run off the back of data centres."

Cleaning up 

Nadine Damblon, chief executive of HydroMiner, which uses hydroelectric power to mine in the Austrian Alps, said there is a need for greater use of renewables in the industry as Asian miners often rely on coal-generated electricity.

Hydroelectric can play a leading role as "one of the most environmentally friendly ways to generate power," she said.

Damblon believes the market will help solve the problem.

"I think in the case of bitcoin mining the capital will flow into more efficient hardware that will need less energy," said Damblon.

The scale of the long-term environmental threat that mining poses is unclear, as is the degree to which it could act as a catalyst for greater take-up of renewables.

In its Global Cryptocurrency Benchmarking Study, the Cambridge Centre of Alternative Finance found that nearly three-quarters of all major mining zones are in China and the United States.

But the likes of Iceland and Austria are gaining ground. Not only do they offer clean hydroelectric power, but also cold temperatures that help save on cooling computer equipment, which can account for up to a third of energy needs.

What is undeniable, said the report, is that "the mining sector has evolved in a short time from a hobby activity performed on personal computers into a professional and capital-intensive industry with its own value chain."

As for how many bitcoin mines or miners there are now, nobody really knows.

Green vs anarchist 

In terms of large-scale mines "there are perhaps about a hundred," said French information technology specialist Marc Bevand.

"Maybe (there are) a few thousand smaller ones" using "one or two racks" of machines rather than the tens of thousands in the largest Asian mines, San Francisco-based Bevand told AFP.

The push for scale to save on energy costs and go green also risks pushing bitcoin against its libertarian, or even anarchist, founding philosophy.

Bitcoin was created to not only allow secure and anonymous transactions, but for the system to be controlled by users and not by a government or corporation.

The push for scale "would concentrate number-crunching power in the hands of the richest or throw into question bitcoin's (decentralised) philosophy," said Teunis Brosens, a senior economist with ING bank.

He forecasts that eventually "banks will create private blockchains which will not face the problems of scale or regulation" which bitcoin is coming up against.

source: news.abs-cbn.com

Bitcoin fever exposes crypto-market frailties

LONDON/NEW YORK - As bitcoin raced to another record high on Tuesday, one of the biggest providers of digital currency wallets, Coinbase, went down under the weight of traffic, leaving many of its more than 10 million customers unable to access their funds.

At the same time, Bitfinex, the world's biggest bitcoin exchange by trading volume, said it was under a heavy denial-of-service (DDoS) attack, meaning its servers had been intentionally flooded with junk online requests, taking down its website and crippling its services.

The latest outages show how the market infrastructure for an immature and volatile instrument that millions of investors have piled into may be ill-equipped to cope with sudden shifts in demand, which is worrying some investors.

During a particularly volatile period of trading on Dec. 7, bitcoin surged from below $16,000 to $19,500 in less than an hour on Coinbase's exchange GDAX, while it was changing hands at less than $16,000 on another, Bitstamp.

As trading volume surged, GDAX and Coinbase went down at least 10 times because of "record-high traffic", Coinbase said.

"More people are engaging with our platform than ever and that bodes well for the future of the digital currency. At the same time, it does create extreme volatility and stress on our systems," the company's director of business operations, David Farmer, said.

"We can confirm that there has been no unusual or suspicious activity. All we know right now is that there is a large amount of traffic," he told Reuters.

Bitfinex said it had been under a sustained DDoS attack since last week.

"While last week the platform traded continuously, to effectively perform emergency maintenance, we took the website down for a brief time today (Tuesday) to mitigate further issues for customers," a spokesman said.

"We are constantly improving our systems to ensure that we're able to both accommodate the immense volume of trading that occurs on our platform while also fending off sustained DDoS attacks," he said.

24/7 MARKET

Daniel Masters, founder of Global Advisors Bitcoin Investment Fund, worries the exchanges would struggle to cope if there were a sudden rush for the exit.

"The ability of these platforms to handle volume is yet to be tested properly," he said. "What happens if this market turns into a lot of sellers? The liquidity itself could be an issue."

Charles Cascarilla, chief executive of New York-based company Paxos, which operates cryptocurrency exchange itBit, told Reuters that dealing with spikes in volume was a problem faced by all exchanges, not just cryptocurrency platforms.

"Clearly the reality is the world of cryptocurrency is growing at an exponential rate right now and everyone is doing their best to expand infrastructure, but it is hard to know what would happen in a hypothetical scenario," he said.

Cameron Winklevoss, co-founder of the Gemini exchange, an early bitcoin investor and an outspoken supporter of the cryptocurrency, said the risk the wider market would suffer badly if one exchange went down no longer existed, as trading volume had become more evenly spread.

"We are definitely beyond the too-big-to-fail situation," he told Reuters. "That was a problem we had five years ago when Mt. Gox accounted for 95 percent of volume."

"Most of the exchanges are doing a good job. This is a 24/7 market, there is no session close and there is no downtime."

Mt. Gox, the world's biggest bitcoin exchange at the time, collapsed in 2014 after hackers stole 650,000 bitcoins, triggering a collapse in the bitcoin price.

The demise of Mt. Gox left more than 24,000 customers unable to access hundreds of millions of dollars of cryptocurrency and cash. More than three years later none has recouped a cent.

BITCOIN FUTURES

Some investors had said they were worried the launch of bitcoin futures by the world's biggest derivative exchanges could exacerbate volatility by prompting some traders to take out large positions betting on a price fall in the future.

The Chicago-based Cboe Global Markets Inc. futures launched a futures contracts on bitcoin on Dec. 10 and CME Group Inc will launch a rival contract a week later.

So far this week, the launch of futures by Cboe does not appear to have created any additional volatility, with price moves less violent than last week's wild trading.

But Tim Swanson, a bitcoin expert and founder of Post Oak Labs, a technology advisory firm, said he was concerned that if the futures liquidity increases there could be an incentive for someone with a large bet against bitcoin to disrupt or attack the network to make money from the ensuing price fall.

CME Group and Cboe declined to comment.

Flooding the bitcoin network with tiny transactions could potentially send the price down sharply, said Swanson, as could sending many sell-signals to the market that are not honoured - so-called spoofing, which is illegal in regulated markets.

A surge in bitcoin trades in recent weeks has also left the blockchain network that the cryptocurrency relies on to process and verify transactions struggling to keep up.

As of Wednesday at 1445 GMT, more than 125,000 bitcoin transactions remained unconfirmed.

In the past week, more than half a million new users have opened wallets with retail-focused bitcoin wallet provider Blockchain, the firm said, taking the total number of users to more than 20 million, from 10 million last year.

The London-based company has also been struggling to keep up, citing "record traffic levels" last week.

VOLATILE TRADING 

Created in 2008, bitcoin uses encryption and a shared blockchain database that enables the anonymous transfer of funds outside of a conventional centralised payment system.

But there is little evidence to suggest buyers are using bitcoin as a means of exchange and payment. On the whole, they buy the cryptocurrency as a speculative investment, attracted by massive price gains, said Garrick Hileman, a research fellow at the University of Cambridge's Judge Business School.

As a result, some banks say they are worried that a collapse in bitcoin would have a knock-on effect on investments by individual investors in other asset classes.

Deutsche Bank said in a report on Dec. 7 that a bitcoin crash - and the impact it could have on retail investors' confidence - was one of the biggest risks to markets in 2018.

Periods of high volatility are not uncommon in other currencies and asset classes, particularly in commodities and emerging markets. But bitcoin's volatility is extreme, and frequent: the one-day price move has been more than 10 percent on nine days in the past three months.

Moves of a similar magnitude for the US dollar, for example, are extremely rare. Its biggest one-day move against a major currency was in January 2015 when the Swiss central bank abandoned a cap on the franc, sending the dollar down 18 percent.

Some bitcoin watchers, such as Swanson, also worry about the risk of one of the big exchanges being suddenly shut by authorities.

In July, US authorities shut down the website of the BTC-e exchange, saying it had "facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking".

BTC-e, which is no longer operating, could not be reached for comment.

The top three exchanges out of more than 100 - Bitfinex, GDAX and bitFlyer - are home to more than 60 percent of all trading, according to data provider Bitcoinity.

Another issue specific to the market is the risk of hacking and theft. More than 980,000 bitcoins have been stolen from exchanges, Reuters has found, with the Mt. Gox heist accounting for the majority.

Last week, a Slovenian cryptocurrency mining marketplace, NiceHash, said it had lost about $64 million worth of bitcoin in a hack of its payment system.

Reporting by Jemima Kelly and Anna Irrera; additional reporting by Amanda Cooper; editing by David Clarke

source: news.abs-cbn.com

Bitcoin's blistering rally: What you need to know

LONDON - Bitcoin blasted past $11,000 to hit a record high for the sixth day in a row on Wednesday after gaining more than $1,000 in just 12 hours, stoking concerns that a rapidly swelling bubble could be set to burst in spectacular fashion.

Here are some facts that you might not know about the largest and best-known cryptocurrency.

    HOW MANY ARE THERE? Bitcoin's supply is limited to 21 million - a number that is expected to be reached around the year 2140. So far, around 16.7 million bitcoins have been released into the system, with 12.5 new ones released roughly every 10 minutes via a process called "mining," in which a global network of computers competes to solve complex algorithms in reward for the new bitcoins.

    ENERGY DRAIN These mining computers require a vast amount of energy to run. A recent estimate by tech news site Motherboard put the energy cost of a single bitcoin transaction at 215 kilowatt-hours, assuming that there are around 300,000 bitcoin transactions per day. That's almost enough energy as the average American household consumes in a whole week.

    BITS OF BITCOIN Bitcoin's smallest unit is a Satoshi, named after the elusive creator of the cryptocurrency, Satoshi Nakamoto. One Satoshi is one hundred-millionth of a bitcoin, making it worth around $0.0001 at current exchange rates.

    BITCOIN BILLIONAIRES Bitcoin has performed better than every central-bank-issued currency in every year since 2011 except for 2014, when it performed worse than any traditional currency. So far in 2017, it is up around 1000 percent. If you had bought $1,000 of bitcoin at the start of 2013 and had never sold any of it, you would now be sitting on $80 million. Many people consider bitcoin to be more of a speculative instrument than a currency, because of its volatility, increasingly high transaction fees, and the fact that relatively few merchants accept it.

    EXCHANGE HEISTS More than 980,000 bitcoins have been stolen from exchanges, either by hackers or insiders. That's a total of more than $10 billion at current exchange rates. Few have been recovered.

    MYSTERY CREATOR Despite many attempts to find the creator of bitcoin, and a number of claims, we still do not know who Satoshi Nakamoto is, or was. Australian computer scientist and entrepreneur Craig Wright convinced some prominent members of the bitcoin community that he was Nakamoto in May 2016, but he then refused to provide the evidence that most of the community said was necessary. It is not clear whether Satoshi Nakamoto, assumed to be a pseudonym, was a name used by a group of developers or by one individual. Nor is it clear that Nakamoto is still alive - the late computer scientist Hal Finney's name is sometimes put forward. Developer Nick Szabo has denied claims that he is Nakamoto, as has tech entrepreneur Elon Musk more recently.

    INFLATED CHINESE TRADING Until earlier this year, it was thought that Chinese exchanges accounted for around 90 percent of trading volume. But it has become clear that some exchanges inflated their volumes through so-called wash trades, repeatedly trading nominal amounts of bitcoin back and forth between accounts. Since the Chinese authorities imposed transaction fees, Chinese trading volumes have fallen sharply, and now represent less than 20 percent, according to data from website Bitcoinity.

    "MARKET CAP" The total value of all bitcoins released into the system so far has now reached as high as $190 billion. That makes its total value - sometimes dubbed its "market cap" - greater than that of Disney, and bigger than the market cap of BlackRock and Goldman Sachs combined.

    CRYPTO-RIVALS Bitcoin is far from the only cryptocurrency. There are now well over 1,000 rivals, according to trade website Coinmarketcap.

    "SHORTING" It is already possible to short bitcoin on a number of retail platforms and exchanges, via contracts for difference (CFDs), leveraged-up margin trading or by borrowing bitcoin from exchanges without leverage. But a number of big financial institutions - including CME Group, CBOE and Nasdaq - have recently announced that they will offer bitcoin futures, which will open up the possibility of shorting the cryptocurrency to the mainstream professional investment universe.

source: news.abs-cbn.com

Bitcoin breaks $10,000 barrier, raising fears of bubble

SINGAPORE - Bitcoin broke above the $10,000 mark for the first time on Wednesday as the virtual currency continued a stratospheric rise that has seen it increase more than tenfold this year.

The cryptocurrency surged to a high of $10,059 in early Asian hours, according to Bloomberg News, though the recent surge in the volatile unit has fuelled fears of a bubble.

Launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto, Bitcoin has had a roller-coaster ride that has taken it from just a few US cents to its current sky-high valuation.

Traded on specialist platforms, with no legal exchange rate and no central bank backing it, Bitcoin is monitored and regulated by its community of users, and is used to buy everything from pizza to a pint in a London pub.

But it has attracted widespread criticism, from financial industry titans to governments.

JP Morgan Chase boss Jamie Dimon in September slammed the unit as a "fraud" and said he would fire his employees if they were caught trading it, while China has shut down Bitcoin trading platforms and South Korea's prime minister Tuesday voiced fears it could lead the young to get involved in fraudulent crime.

Analysts say the popularity has been driven by growing interest from major investors and a decision last month by exchange giant CME Group to launch a futures marketplace for the currency, which has not been listed on a major bourse before.

But there is growing unease with the rate of growth, which has seen it increase in value from a 2017 low of $752 in mid-January.

"This is a bubble and there is a lot of froth. This is going to be the biggest bubble of our lifetimes," warned hedge fund manager Mike Novogratz at a cryptocurrency conference Tuesday in New York, according to Bloomberg News.

Commentators also suggest some are buying it as an alternative bet in times of global economic uncertainty.

But critics point to its volatility, an apparent vulnerability to theft and its use in illicit purchases online.

In one of the most high-profile scandals to hit the currency, major Tokyo-based bitcoin exchange MtGox collapsed in 2014 after admitting that 850,000 coins -- worth around $480 million at the time -- had disappeared from its vaults.

Bitcoin's use on the underground Silk Road website, where users could use it to buy drugs and guns, was also presented as proof it was a bad thing.

Despite concerns, most observers believe it is unlikely to suffer heavy falls soon.

source: news.abs-cbn.com

Japan police arrest MtGox CEO over loss of bitcoins: media

TOKYO, Japan - Japanese police on Saturday arrested Mark Karpeles, CEO of the collapsed MtGox bitcoin exchange, over the loss of nearly $390 million worth of the virtual currency, local media said.

Karpeles is suspected of having accessed the computer system of the exchange and of falsifying data on its outstanding balance, Kyodo News and public broadcaster NHK said.

source: www.abs-cbnnews.com