Your dose of crypto news and analysis from @BTO and @Goldfinger

Famous crybabies, the Winklevoss twins, are now reportedly crypto-billionaires. They put $11 million of their meagre ($65 million) Facebook payout into Bitcoin in 2013 and have been HODLers ever since. Kudos to them! Respect.

The Winklevii were also the next contestant on the Bitcoin Price is Right this week where they predicted a multi-trillion dollar value for BTC in the long term. They didn’t offer a timeline, but if you recall John McAfee’s latest “eat my own dick” projection, he predicted $1 million “Bircoin” by 2020:

This would put the BTC market cap WELL into the trillions of dollars — so let’s go with 2020 as the target date for multi-trillion dollar Bitcoin. But, hold up — it seems McAfee himself doesn’t trust Winklevii mathematics:

I don’t know what to believe anymore.

The actual price of Bitcoin was — for crypto — relatively stable this week. Until today that is. BTC came alive late yesterday, shooting up from around US$16,500 to where it is currently trading: ~ US$17,850. But the big gainers this week were the alt-coins:

  • Ethereum trading around US$690, up 51% on the week
  • Bitcoin Cash trading around US$1,780, up 22% on the week
  • Dash trading around US$895, up 23% on the week
  • Litecoin trading around US$309, up 149% on the week
  • Monero trading around US$313, up 13% on the week
  • ZCash trading around US$463, up 41% on the week

WTF did I miss this week in crypto?

How Fear Is Being Used to Manipulate Cryptocurrency Marketshttps://www.psychologytoday.com/blog/mind-in-the-machine/201712/how-fear-is-being-used-manipulate-cryptocurrency-markets

This is a must read, and the only article of its kind that I’ve seen. The author defines what he calls the “FOMO-FUD cycle”, and it’s something crypto investors should all become familiar with. When crypto price surges happen, word spreads quickly across the global infosphere, through social media platforms like Reddit, Twitter, and Facebook, creating a tidal wave of people rushing in to buy out of fear of missing out — FOMO. Consequently, many of those investors become evangelists for their chosen coin, since one’s financial success then becomes dependent on that coin’s continued growth. This results in a self-amplifying crypto-craze.
But it often doesn’t last long. As hype grows, and FOMO rapidly spreads, it is eventually met by a wave of fear, uncertainty, and doubt — FUD. Skepticism, evolves into criticism, and if that doesn’t serve to calm the price down, misinformation and personal attacks that defame the character of a coin or company often enter the game. IOTA is given as an example of the FOMO-FUD cycle in action.
The author’s key message? “To ensure the cryptocurrency movement moves along the right path, we who participate in it must teach ourselves to be skeptical not only of sensationalized statements, but also of skeptical statements themselves. We must be aware of how easily we are manipulated when our fear systems are triggered, and adjust our investing behavior accordingly. Those who have the time should actively try to bring clarity to the discussion when they have reliable information or insight.”

Ethereum Miners Save the Kitties, Capacity Raisedhttp://www.trustnodes.com/2017/12/10/ethereum-miners-save-kitties-capacity-raised

After last week’s CryptoKitty network congestion fiasco, we were greeted with positive news this week that ETH miners had come together to raise the gas limit resulting in an increase in the network’s capacity per block and a decline in the transaction backlog. Kitty crisis averted — for now. See here for more. (http://www.trustnodes.com/2017/12/11/ethereum-fees-fall-congestion-reduces)

How to Discuss Bitcoin Without Sounding Like an Idiothttps://hackernoon.com/how-to-discuss-bitcoin-without-sounding-like-an-idiot-a4851755c39

With the holidays fast-approaching, check out this handy guide to ensure you don’t sound foolish when discussing crypto at your family gatherings — because the topic is certain to come up.

Canadian ETF providers scramble to launch products as bitcoin futures begin tradinghttps://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/chicago-bitcoin-futures-launch-good-news-for-etf-industry/article37285183/

With Bitcoin futures on CBOE now trading, and CME set to launch their product this Sunday, the race is now on to launch crypto ETFs. In the United States, there are already approximately 12 ETF filings in queue looking to provide investors access to both the bitcoin or blockchain-technology market. Seven of them are looking to access the bitcoin futures market, while two others are competing to be the first direct-to-bitcoin ETF. The most famous among them is the Winklevoss Bitcoin ETF (COIN), which was filed more than three years ago. In Canada, at least two investment firms have publicly filed to launch what could be the first bitcoin exchange-traded funds in North America.

France Gives Go-Ahead for Blockchain Trading of Unlisted Securitieshttps://www.coindesk.com/france-gives-go-ahead-for-blockchain-trading-of-unlisted-securities/

There is no doubt in my mind that securities of all forms will ultimately wind up being tracked and traded on blockchains. In a small step towards this, we learned this week that France has adopted new rules that will enable banks and fintech firms to establish blockchain platforms for unlisted securities trading. The change will allow the trading of the assets without relying on middlemen and theoretically at near-instant speeds.

Traders and bankers will get some of their bonuses in bitcoinhttps://nypost.com/2017/12/09/traders-and-bankers-will-get-some-of-their-bonuses-in-bitcoin/

If I had this option I’d take it too — pay me in BTC!
In related news, Japan's GMO Internet Group, and ISP in crypto-friendly Japan, is introducing a system for up to 4,000 of its employees to receive part of their salary in Bitcoin. Pretty cool!

SEC issues Statement on Cryptocurrencies and Initial Coin Offeringshttps://www.sec.gov/news/public-statement/statement-clayton-2017-12-11

This is a big step towards legitimizing ICOs and cryptocurrencies from a regulatory perspective. Before this week, we had fairly limited commentary from the SEC on ICOs, and now we have quite a comprehensive statement on cryptocurrencies in general, as well as ICOs. And it isn't laced with FUD; rather, it is indicative of a progressive attitude towards this new asset class as a legitimate means of raising capital. A few key quotes from the statement:
“I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects.”
“We at the SEC are committed to promoting capital formation. The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing. I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike.”
“I encourage Main Street investors to be open to these opportunities, but to ask good questions, demand clear answers and apply good common sense when doing so.”

Ethereum Now Processes Almost One Million Transactions a Dayhttp://www.trustnodes.com/2017/12/13/ethereum-now-processes-almost-one-million-transactions-day

Ethereum has been hitting new highs this week not just in price, but in terms of the number of daily transactions processed. When the linked article was posted, the network had hit a new high of 872,340 transactions in a single day — 3X more than Bitcoin. And yesterday, it processed 942,559 transactions according to etherscan.io.

Japanese Shipping Giant, IBM to Trial Blockchain in Cross-Border Tradehttps://www.coindesk.com/japanese-shipping-giant-ibm-to-trial-blockchain-in-cross-border-trade/

Japanese shipping firm Mitsui OSK Lines (MOL) and partners including IBM are to undertake a blockchain proof-of-concept looking to streamline international trade flows. The "demonstration test" will see real-time trade transactions made using a blockchain-based application. The project will see trade agreements, logistics and insurance documents, and more, digitized, stored and shared among participants, bringing a number of benefits over traditional trade systems.

Parity Urges 'Rescue' Fork to Reclaim Frozen Millionshttps://www.coindesk.com/parity-proposes-hard-fork-to-reclaim-frozen-160-million/

Remember the $275 million worth of Ether stuck in Parity wallets? Yea, it’s still stuck. Parity has suggested as many as four protocol changes to free the funds, but, as originally feared, it seems this will only be possible with a hard fork of the Ethereum blockchain, which will be very contentious. Stay tuned. It would totally suck to be one of the affected ETH holders.

Trump Signs Defense Bill Authorizing Blockchain Studyhttps://www.coindesk.com/trump-signs-defense-bill-authorizing-blockchain-study/

Even President Trump is getting into blockchain, signing a $700 billion military spending bill that includes a mandate for a blockchain cybersecurity research study — that is, assuming he read the bill. The study will constitute “an assessment of efforts by foreign powers, extremist organizations, and criminal networks to utilize such technologies;...[and] an assessment of the use or planned use of such technologies by the Federal Government and critical infrastructure networks”.

Bitcoin Q&A with Andreas Antonopoulos: “Energy Consumption”https://twitter.com/aantonop/status/940672923475611648

In this video, Andreas flips the script on the crypto mining naysayers and explains how the power consumption “issue” is often misrepresented. He says that, in fact, “Bitcoin is an environmental subsidiary to alternative energy all around the world”. The guy has a way with words.

A new technology promises to make bitcoin useful to pay for things, and not to hoardhttps://qz.com/1150475/the-lightning-network-promises-to-make-bitcoin-useful-to-pay-for-things-and-not-to-hoard/

The technology is called the Lightning Network and rather than typing out a boring description here, I found this great video that does a much better job at explaining the technology in simple terms than I ever could:

This Fund Manager Doesn't Believe in Buffett and Is Buying Everything Cryptohttps://www.bloomberg.com/news/articles/2017-12-14/fidelity-manager-buys-everything-crypto-in-disruptor-strategy

Mark Schmehl flouts Warren Buffett, thinks valuation is overrated and says most other rules of investing are “total baloney.” He just completed Fidelity Investments’ most successful Canadian fund launch ever. Among Canadian stocks, he’s the largest investor in toymaker Spin Master Corp., and he also owns Shopify Inc., Canada Goose Holdings Inc., and "everything" in the emerging cryptocurrency space, including HIVE.

Google: Bitcoin is the #2 Global News Search Term for 2017https://trends.google.com/trends/yis/2017/GLOBAL/

Four Years of Token Sales, Visualized in One Graphic — wait for it...

Coins and tokens and stocks, oh my!

[Note — Net change and % change figures are from the close last Friday to the close today.]

HIVE Blockchain (TSXV:HIVE) — $HIVE — Net Change: +$0.19; % Change: +5.7%

BIG news from HIVE this week. They’re adding a third phase to their GPU mining farm in Sweden, increasing the proposed computing power of that facility by 50% of what had previously been announced. And — yes — a Bitcoin mine! A huge one: 20 MW. This will significantly expand and diversify the types of coins HIVE can mine, most notably Bitcoin and Bitcoin Cash. Once operational (target: Sept 2018), this ASIC-based facility will represent nearly half of HIVE’s overall mining capacity. They’re also doing what I’m guessing will be the biggest financing ever done by a crypto pubco — a $100 million unit offering that we learned today, after just a couple days of marketing, has been increased to $115 million.

HIVE’s strategic partner, Genesis Mining, is stepping up to the plate again and will be subscribing for a minimum of $3 million in the financing. And speaking of Genesis, here’s a must watch video just released today by them on the “Secret Ingredient of Cryptocurrency Mining” — their proprietary software, coincidentally called Genesis Hive, which monitors and optimizes all of Genesis’ and HIVE’s mining rigs:

Overstock.com (NASDAQ:OSTK) — $OSTK — Net Change: +US$23.15; % Change: +51.4%

OSTK went on a tear this week, presumably in anticipation of the upcoming token sale — beginning Dec. 18 — by its >80%-owned subsidiary, tZERO — an SEC-compliant alternative trading system (ATS) that will provide a platform for the exchange of cryptographic tokens categorized in the U.S. as securities. The stock had previously reached an all-time high of around US$65 on Nov. 22, but then backed off significantly, falling to the low US$40s. But it’s back again and today hit another all-time high of US$70 and closed out the week at US$68.20.

HashChain Technology (TSXV:KASH) — $KASH — New listing — Trading to commence Monday, Dec. 18

There's a new publicly-traded crypto miner coming to the TSXV on Monday. HashChain Technology will commence trading under the symbol KASH. They will operate ASIC-based mining rigs, with an initial focus on Dash (which had a great run this past week), with Bitcoin to follow in January 2018. Click here to read the full news release. The company has raised approximately $4.4 million dollars to date with 41,179,000 common shares issued and outstanding. Once their initial 870 rigs are in full operation in January, HashChain's energy consumption dedicated to crypto mining will be ~1.2 MW.

In addition to mining, the company has acquired a Dash Masternode (required a collateral investment of 1,000 Dash coins). The Masternode investment is worth approximately USD$880,000 today. It provides the company the right to participate in budget funding decisions for the Dash network while also receiving a return on investment in the form of virgin coins and currency appreciation.

Other crypto/blockchain-related stocks riding the wave:

  • Mogo Finance (TSX:MOGO) — $MOGO — Net Change: +$0.04; % Change: +0.6%
  • MGT Capital (OTC:MGTI) — $MGTI — Net Change: +US$1.46; % Change: +53.3%
  • LeoNovus (TSXV:LTV) — $LTV — Net Change: -$0.05; % Change: -10.1%
  • Global Blockchain (TSXV:BLOC) — $BLOC — Net Change: +$0.21; % Change: +9.3%
  • BTL Group (TSXV:BTL) — $BTL — Net Change: +$0.71; % Change: +5.7%
  • NetCents Technology (CSE:NC) — $NC — Net Change: -$0.61; % Change: -15.1%
  • 360 Blockchain (CSE:CODE) — $CODE — Net Change: +$0.005; % Change: +1.8%
  • Riot Blockchain (NASDAQ:RIOT) — $RIOT — Net Change: +US$12.65; % Change: +79.8%
  • eXeBlock Technology (CSE:XBLK) — $XBLK — Net Change: -$0.07; % Change: -4.8%
  • BIG Blockchain Intelligence Group Inc. (CSE:BIGG) — $BIGG — Net Change: -$0.59; % Change: -25.5%
  • And a few others that have been getting some attention: Atlas Cloud (CSE:AKE) - $AKE; Block One Capital (TSXV:BLOK) - $BLOK; Calyx Bio-Ventures (TSXV:CYX) - $CYX; ePlay Digital (CSE:EPY) - $EPY; LottoGopher (CSE:LOTO) - $LOTO; HealthSpace Data Systems (CSE:HS).

The CryptoTechnician Report

Of the main cryptocurrencies that I follow, Bitcoin now actually has the weakest chart with strong signs of fading momentum and volume as price makes marginal new highs.

A large rising wedge has formed on the 4-hour logarithmic chart. Rising wedges after huge advances have a tendency to be topping patterns, however, they can also be continuation patterns. From my vantage point the risk/reward of being long Bitcoin at $17,000+ is not favorable.

Ethereum continues to follow classical charting principles. The breakout above resistance near $500 led to a sharp ~50% advance to ~$750, before correcting back to the low $600s. Ethereum continues to show a clean bill of health from a technical perspective.

Litecoin was the story of the week, more than doubling and nearly reaching $400 at its highs for the week. Litecoin has pulled back and formed a bullish falling wedge pattern. The breakout from the falling wedge targets a move back up to near $400.

Total Crypto Market Cap reached nearly US$550 billion this week which prompted Ethereum founder Vitalik Buterin to tweet the following question:

Regulation is on its way to the cryptocurrency space and here are a couple of examples:

Funny things we saw this week

Hat tip to @lukejackson for this one — the Useless Ethereum Token https://uetoken.com/

Check out how ICO participants fared by clicking here. It still has a market cap of around US$30,000 — lol.

As we head into the NFL playoffs in a few weeks, it’s time to start thinking about SuperBowl commercials. Well, someone has put together a mock Coinbase SuperBowl commercial. Enjoy! When do you think we’ll see the first actual crypto-related SuperBowl commercial?

And another hat tip — this time for @BrianBitcoinBull — for introducing me to the term “nocoiner” - lol:

And, lastly, as we head into the year-end, it’s time to start thinking about your crypto-trading tax obligations:

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