Bitcoin Ain’t What It Used To Be, Pioneer Investor Says

A millionaire by age 18, early Bitcoin (BTC) investor Erik Finman said the environment around Bitcoin has significantly changed since 2011 — and not for the better. 

“It just ain’t what it used to be,” Finman told Cointelegraph in a message on Jan. 26, 2020.

Recounting the early days, Finman explained:

“Bitcoin, when it first came out, was incredible. It wasn’t just cutting edge technology – it was bleeding edge! You just felt the energy in the air. That this was the real deal. Everyone felt united in this cause — this mission. Those were some of the most beautiful moments of my life.”

Investing in 2011

Finman made headlines over the past several years for his success as a young Bitcoiner. Finman invested $1,000 into BTC in 2011, turning him into a millionaire by the age of 18 due to Bitcoin’s dramatic price increases, Cointelegraph detailed in June 2017. 

In late 2018, however, Finman expressed his thoughts on Bitcoin’s eventual demise based on several factors, including community infighting, etc. 

Changing tides

The atmosphere seen in Bitcoin’s early days is now gone, Finman told Cointelegraph. Adding to his reminiscence of the asset’s beginnings, he noted:

“[T]hose times of ‘unity’ & ‘cutting edge’ technology seem to be left in the past. I really care about Bitcoin – but the community can’t seem to get it together in my opinion. I’ve tried to get involved within the community to fix it – but it was very hostile. There is still wonderful people in the community and incredibly smart people working on the technology problem.”

Looking toward the future

A popular opinion in the crypto space sees Bitcoin hitting a $100,000 price tag at some point.   Finman sees no real chance for a $100,000 or $1 million Bitcoin if the community does not change, barring any drastic global disruptions, he explained.  

“Even if the world were to destabilize, Bitcoin isn’t necessarily THE CRYPTOCURRENCY for people to put their money in, in a time like that,” he said, noting Monero and Zcash as potentially better options.

Relating the situation to the death of a popular social media entity, Finman added, “Bitcoin is the next MySpace if the community can’t make drastic changes.”

Growing older

Finman has been in the Bitcoin game a considerable length of time, so his comments carry weight. Finman first invested in Bitcoin at the age of 12, so his views on the overall situation in 2011 may have differed from adults who bought it at the same time.

Several data points do, however, line up with Finman’s comments on community disagreements, including the Bitcoin Cash (BCH) fork in 2017, and the birth of Bitcoin maximalism.

Cardano founder Charles Hoskinson has also expressed issues with Bitcoin. “One of the biggest problems with Bitcoin, […] is that it’s blind, deaf and dumb and that was by design,” Hoskinson said in October 2019 in an interview on Anthony Pompliano’s Off the Chain podcast.

Cointelegraph News

British Financial Watchdog Approves BCB Group as Authorized Payment Firm

BCB Group, a European crypto-focused payment processor for the likes of major global crypto firms like Coinbase, has secured a license from British regulators.

The United Kingdom’s Financial Conduct Authority (FCA) has officially approved the firm’s core subsidiary, BCB Payments, as an authorized payment institution (API), BCB Group announced on Jan. 29.

The company is now officially regulated both in the U.K. and Switzerland

Having secured an API license from the FCA, BCB Group now holds two regulatory approvals to offer cryptocurrency-related services in Europe. BCB Payments sister firm, BCB OTC Trading SARL, is already regulated in Switzerland as it’s overseen by the Financial Services Standards Association, a self-regulatory organization recognized by the Federal Financial Market Supervisory Authority.

According to the firm, BCB Group is now the only dually regulated institution of its kind to offer customers a unified suite of payment services, crypto trading and custody services. The company’s platform is enabled with its proprietary application programming interface and integration into the R3’s blockchain network Corda, the press release notes.

Coinbase, Bitstamp and Galaxy Digital are among clients

More specifically, BCB Group’s business is focused on providing business-to-business payment services and cryptocurrency market liquidity for institutional clients. The company services some of the world’s largest crypto companies including United States-based crypto exchange and wallet service Coinbase and major European crypto exchange Bitstamp. Other clients include major crypto merchant bank Galaxy Digital and crypto brokerage firm Tagomi, the firm said.

Oliver von Landsberg-Sadie, founder and CEO at BCB Group, noted that the recent regulatory approval shows that the industry is able to grow while ensuring that it fully complies with “some of the most stringent regulations in force globally.

The news comes weeks after the FCA officially announced that it began supervising Anti-Money Laundering (AML) compliance of local crypto-engaged companies. On Jan. 10, the British financial regulator purportedly became the U.K.’s sole AML authority for the crypto business.

Source Cointelegraph

Alleged Launderer of $4B in BTC Vinnik Charged in France After Extradition

French authorities have charged former operator of now-shuttered crypto exchange BTC-e and Russian national Alexander Vinnik.

Bloomberg reported on Jan. 28 that Vinnik’s lawyers said that he will remain in France to face his charges following his recent extradition from Greece. According to an unspecified official at the prosecutor’s office, Vinnik was charged with extortion, aggravated money laundering, conspiracy and harming automatic data-processing systems.

The legal shuttle

One of his lawyers said that after his trial in France has run its course, authorities are expected to send him back to Greece so he can be extradited to the United States. After the U.S. prosecution is over, he would be finally sent to Russia. The French investigation is ongoing and no trial has been ordered. Ariane Zimra, a French lawyer for Vinnik said:

“There is no causal link between what Alexander Vinnik is being accused of and Alexander Vinnik.”

Vinnik is currently in a French hospital after going on a hunger strike for 40 days to protest his detention. Vinnik’s lawyers also recently filed a complaint that alleges a violation of his rights on behalf of his children.

Zoi Konstantopoulou, one of his lawyers, suggested that he is being persecuted because he is a blockchain genius and is seen as a threat to the banking system. He said:

“Alexander’s crime is to be Russian and a person with extraordinary technological knowledge that could liberate people economically. […] The Greek Minister of Justice has in essence decided that this person is going to spend his life being extradited, judged and then re-extradited, re-judged and yet again re-extradited and re-judged.”

An overview of Vinnik’s case

Vinnik is believed to be involved in the hack of Bitcoin exchange Mt. Gox since the 300,000 BTC stolen there were allegedly not only laundered through BTC-e but were also on his personal wallet. Given those suspicions, the Mt. Gox trustee contacted the U.S. Department of Justice and requested information about him.

Vinnik was first indicted by the U.S. in July 2017. A Greek Court later ruled for his extradition to Russia in September 2018. In July 2018, however, local authorities ruled to extradite him to France, where he is now.

The matter of Vinnik’s extradition is a major diplomatic ordeal with multiple countries trying to obtain his extradition. Russia, for instance, filed multiple requests and asked for help from the United Nations High Commissioner for Human Rights in an attempt to bring him under its jurisdiction.

Cointelegraph News

Millennials Prefer Bitcoin to Alibaba, Netflix Stock as GBTC Hits $10K

Millennials prefer to hold Bitcoin (BTC) equity than invest in some of the world’s best-known companies, surprising new data reveals. 

In a report originally released in November, Charles Schwab, one of the United States’ biggest brokerage firms, shed new light on the increasingly pro-Bitcoin stance of Millennials compared to previous generations. 

GBTC makes inroads at Charles Schwab

1.84% of assets held as equity with Schwab are for the Grayscale Bitcoin Trust (GBTC), a Bitcoin investment vehicle that saw record participation in 2019. 

This is more than equity Millennials held in Berkshire Hathaway, Netflix, Disney Corp., and even Microsoft and Alibaba.

By contrast, Grayscale did not figure in the top choices of Generation X and Baby Boomer investors. Apple constituted the most popular overall equity holding across all three cohorts.

Reacting to Grayscale, Whittemore crypto marketing firm founder, Nathaniel Whittemore, described the company’s progress as “crazy.”

Twitter responses further alluded to the incoming transfer of wealth to Millennials from their predecessors. As Cointelegraph reported, the inheritance total could near $70 trillion, which would fall into the hands of those much more likely to expose their wealth to Bitcoin. 

$10,000 returns to BTC market

GBTC itself meanwhile currently trades with an implied BTC/USD price above $10,000, something, which it last achieved on Jan. 7 and previously in mid-November. 

Historical price data for GBTC

Historical price data for GBTC. Source: Grayscale

The premium for GBTC now stands at almost 8%, reflecting a common assumption that institutional interest overall in Bitcoin is growing. 

At the same time, commentators predict a decrease in the premium occurring in sync with the 12-month timeout for two specific trading weeks last year.

Uploading a chart from Grayscale’s annual Digital Asset Investment Report, co-founder and Castle Island Ventures partner Nic Carter forecast earlier this month:

“I’d be willing to bet that the GBTC premium will be crushed to single digits on the week of July 15, 2020, and October 21, 2020.” 

GBTC weekly investment tallies for 2019

GBTC weekly investment tallies for 2019. Source: Grayscale

Cointelegraph News

Crypto Payments on Darknet Markets Doubled for First Time Since 2015

The volume of cryptocurrency flows coming on darknet markets have doubled for the first time in four years, a new study says.

In part of its 2020 Crypto Crime Report published on Jan. 28, Chainalysis — a New York-based blockchain analytics firm — found that darknet markets have significantly increased their share of total incoming crypto transactions in 2019, doubling from 0.04% in 2018 to 0.08%. 

Crypto on darknets is resilient to scrutiny by law enforcement

According to the study, total market sales in crypto grew 70% in 2019 to account for more than $790 million worth of cryptocurrency after seeing a small decline in 2018. This was the first time when sales surpassed $600 million, Chainalysis says.

Despite the total share of crypto payments on the darknet remaining quite low, the recent growth of volumes indicates the resilience of darknet markets to increased legal scrutiny from global regulators, Chainalysis believes. According to the firm, the total number of active darknet markets remained stable in recent years despite heightened law enforcement.

Specifically, the study suggested that as some markets close, others still manage to fill the gap and satisfy client demand. While eight of the markets active in 2018 were shut down in 2019, eight new ones opened up that same year, keeping the total number of active markets worldwide at a steady 49.

Darknet market share of all crypto payments, 2013-2019

Darknet market share of all crypto payments, 2013-2019. Source: Chainalysis

Possible reasons behind the surge

According to Chainanlysis, the increasing share of cryptocurrencies coming to darknet markets is purportedly caused by the implementation of new technologies, which makes the operating process more decentralized. In order to avoid shutdowns by law enforcement, some darknet markets are adopting new infrastructures that have a fully decentralized structure, which is similar to the Tor web browser or “to the blockchain itself,” Chainalysis noted.

As part of the study, Chainalysis said that it expects to see more darknet markets accepting or even requiring the usage of privacy-oriented cryptocurrencies such as Monero (XMR). In January 2019, the company found that the value of Bitcoin sent to darknet markets had increased by 70% in 2018.

As global regulators and enforcement authorities are doing their best to shut down darknet markets operating with cryptocurrencies, new arrests reports keep coming in. In early January 2020, a citizen of the United States was charged with illegal narcotics distribution in exchange for Bitcoin.

While some marketplaces are being shut down, others are making even more ambitious expansion plans to go beyond their primary focus of distributing illicit products. Russia’s largest darknet marketplace announced plans to raise $146 million in a token offering that would allow it to go global in late 2019. Announced by Hydra, an illegal marketplace for illicit substances, the token sale is in no way legal in terms of global securities laws.

Cointelegraph News

A Month After Launch, Bakkt Bitcoin Options Volumes Are Lackluster

Little more than a month after their launch, Bitcoin (BTC) options contracts on the Intercontinental Exchange’s digital asset platform Bakkt appear to have seen sluggish uptake.

The latest available reports for the contract, Jan. 24 and Jan. 27, reveal that 11 days have elapsed since the last trade.

Traders bide their time

As reported, Bakkt launched its new BTC options contract in early December, shortly after rolling out a cash-settled Bitcoin (BTC) futures offering in November. 

Options are derivatives that are designed  to provide traders with additional flexibility hedge against an asset’s price swings in either direction: thus an options contract offers them the chance to purchase either a right to buy (a call option) or sell (a put option) the given asset at a specified “strike price” determined on or before the contract’s expiration date.

Both the new options contract and cash-settled futures followed upon Bakkt’s existing physically delivered Bakkt Bitcoin (USD) Monthly Futures contract — a pioneering product that was the first in the industry to give futures traders direct exposure to the underlying cryptocurrency. 

As reported, the physically-settled futures contract had met with underwhelming volumes in its early days — a fact that was immediately unfavorably compared with the fiat-settled BTC futures on CME, which first went to market in December 2017.

Yet uptake for the product eventually picked up, in correlation with a period of volatility in Bitcoin’s spot market valuation at the time (late October-November 2019). 

Aside from Bakkt, market participants including Malta-based cryptocurrency exchange OKEx and CME have both launched or plan to launch Bitcoin options contracts this year.

Cointelegraph News

City of Zermatt Switzerland Now Accepts Tax Payments in Bitcoin

The municipality of Zermatt, Switzerland — home to the iconic Matterhorn — is now the second location in Switzerland where taxpayers are officially allowed to pay their taxes in Bitcoin (BTC).

In order to unlock the new tax payment option, the authorities of the Zermatt have partnered with Switzerland’s major crypto financial services company Bitcoin Suisse.

Bitcoin Suisse to convert Bitcoin into Swiss francs 

According to an announcement by Bitcoin Suisse, Zermatt started accepting Bitcoin as a means of payment for local taxes and transactions on Jan. 28, 2020.

By partnering with Bitcoin Suisse, the authorities of Zermatt are now able to convert taxpayers’ Bitcoin into Swiss francs through Bitcoin Suisse which then transfers the amount in fiat currency to the municipality’s bank account.

Taxpayers are able to pay online or via Bitcoin Suisse’s point-of-sale device

Specifically, local taxpayers will be able to pay their taxes in Bitcoin via a point-of-sale tool installed in the Zermatt town hall or an online payment portal. However, in order to pay taxes with Bitcoin online, the taxpayers will have to apply directly to the Zermatt Tax Office for a crypto payment solution, the announcement notes.

Romy Biner-Hauser, the mayor of Zermatt, outlined that the new tax payment option aims to meet increased demand for Bitcoin-based tax payments:

“An innovative, pioneering spirit is one of the trademarks of Zermatt, which is why we are happy to support residents in providing them with the solutions they require.”

The city of Zug became the first in Switzerland to accept Bitcoin payments in 2016, Bitcoin Suisse said. As reported by Cointelegraph, the capital of Switzerland’s “Crypto Valley” began accepting Bitcoin payments for certain city services such as public utilities in May 2016. The payment was reportedly capped at 200 francs worth of Bitcoin.

While Switzerland continues to expand its crypto-financial services industry in terms of Bitcoin-powered tax payments, some global authorities have recently deemed such an option too risky due to Bitcoin’s high volatility. 

On Jan. 8, lawmakers in the United States’ New Hampshire state legislature retracted a bill that would have allowed state agencies to accept crypto as payment for taxes. According to lawmakers the initiative was “inexpedient to legislate” as Bitcoin’s price is not stable.

Cointelegraph News

OneCoin Crypto Ponzi Scheme Used Fake Reviews to Improve Its Image

Research conducted by the Digital Forensic Research Lab (DFRLab) of the Atlantic Council think tank suggests that the infamous cryptocurrency-themed Ponzi scheme OneCoin used fake reviews on TrustPilot and Quora to lure investors.

According to a report published on Jan. 29, OneCoin received an anomalous number of five-star reviews on TrustPilot after the media started negatively covering OneCoin in October 2019.

OneCoin’s TrustPilot reviews over time

OneCoin’s TrustPilot reviews over time. Source: DFRLab

Per the report, of the 579 TrustPilot reviews of OneCoin,  90% were positive and about 400 of the five-star ratings were published in a single month. DFRLab states that OneCoin also received some one-star ratings, but those were by far outnumbered by positive reviews.

Signs of inauthentic activity

Researchers were unable to guarantee whether the accounts behind the reviews were inauthentic or automated due to TrustPilot’s design, but said that their activity was suspicious:

“October 2019 spike in five-star ratings, however, indicated an abnormal influx of favorable reviews just as OneCoin’s public relations and legal woes mounted. The possibility remains that the influx for both ratings and reviews was organic, though the timing and extreme bias was highly suspicious.”

DFRLab also found profiles praising OneCoin on question-answer platform Quora which showed “inauthentic behaviour, such as no profile pictures, no biographical information, inconsistent posting times, and an exclusive interest in OneCoin-related discussions.”

The researchers show one profile, in which the owner described herself as a “cryptocurrency expert and investor” but only answered questions about OneCoin. The account was active from January to March 2018, and its peak activity was when OneCoin was most active. The report reads:

“As OneCoin’s legal challenges mounted, the company’s pyramid marketing scheme garnered significant attention. Its digital marketing tactics, however, received considerably less scrutiny.”

OneCoin is one of the most well-known scams in the cryptocurrency space. The official OneCoin website only ceased operations in early December 2019. During the same month, the New York Southern District Court granted a continuance in the lawsuit against David Pike — the CFO of a private equity fund — over his alleged link to the scam.

Source Cointelegraph

Bitcoin’s Best Q1 Since 2013 to ‘Escalate’ If $9.5K Is Broken: Trader

Bitcoin (BTC) investors have already made more on their holdings this quarter than any Q1 since 2014, as data shows a sustained influx of institutional interest.

According to findings from statistics resource Skew Markets, Bitcoin’s gains so far in 2020 amount to just under 30%. In no other quarter in the past six years did markets perform that strongly. 

2020 thrashes downbeat Q1 trend

By contrast, Q1 tends to be an underwhelming period for Bitcoiners. 2014 saw 39% losses, while 2015 and 2016 saw BTC/USD drop by 24% and 3% respectively.

Only 2017 and 2019 managed to produce positive moves, but at around 11%, neither comes close to this year. 2011 and 2013 were the years Q1 returns were strongest, at 165% and 570%, according to Bitinfocharts’ price index.

Bitcoin quarterly returns

Bitcoin quarterly returns. Source: Skew Markets

The impressive stats come amid renewed faith in Bitcoin’s long-term potential. As Cointelegraph reported, Bitcoin futures data suggests institutions truly are engaging with the cryptocurrency on a new level as more products hit the market. 

Aggregate open interest across futures products is now higher than ever, with Skew recording a total of around $3.7 billion as of Jan. 28. Volume across Bitcoin markets is also on the increase.

“Volume tells all,” trader Scott Melker summarized as he hailed encouraging progress for BTC price versus volume in 2020.

Conversely, regular consumers appear little interested in Bitcoin’s recent price rise over $9,000 — Google search requests remain flat. 

Is BTC approaching “greed correction”?

That higher price is also subject to speculation from commentators. In an analysis on Tuesday, trader Tone Vays demanded the $9,000 level hold for at least several days before he considers a bull market in effect.

Another indicator, the Bitcoin Fear & Greed Index, which charts Bitcoin’s likely price trajectory based on investor sentiment, is flashing bearish. 

Currently, with a score of 57, the metric is slanted towards suggesting the market is “due for a correction.”

Bitcoin Fear & Greed Index

Bitcoin Fear & Greed Index. Source:

How much the potential losses would total meanwhile remains a subject of speculation in itself. Bitcoin’s January performance has already turned some analysts decidedly bullish, with several recently telling Cointelegraph that previous lows of $6,000 would not return. 

For regular Cointelegraph contributor filbfilb, by contrast, only one major resistance barrier remains to further highs after Bitcoin beat resistance provided by its 200-day moving average (MA).

“200 dma found the support. Next level is the old resistance at $9,555 daily close above there and things could escalate,” he told subscribers of his Telegram trading channel on Tuesday.

Cointelegraph News

Bitcoin Price Rallies to Set a 2020 High Near $9.5K – Is $10K Next?

Bitcoin (BTC) price has rallied to $9,439 and bulls have again shown that they have no intention of letting the crypto market’s most valuable asset stay below the $9K mark. 

Bitcoin daily price chart. Source: Coin360

Earlier in the day Bitcoin’s price dropped below $9,000 to a daily low at $8,879, which led some analysts to issue dismayed calls for a revisit and consolidation around the $8,300 to $8,500 range. 

While the thought of a pullback was the least desired scenario amongst traders, it seems perfectly reasonable given Bitcoin’s robust rally from $8,200 at the start of this week. 

Previously Cointelegraph contributor Michaël van de Poppe explained that after key overhead resistance levels are broken, assets often need to retrace to the support before resuming an uptrend. Thus, as shown by the Crypto Fear and Greed Index, today’s move below $9,000 had not weighed too heavily on trading sentiment.

Bitcoin’s Fear and Greed Index. Source:

The hourly chart shows that the most recent surge to $9,439 was propelled by a high volume spike and the following sell volume candle shows that the 3.4% move triggered a block of sell orders from traders anticipating that $9,500 would present staunch resistance.

BTC USD 1-hour chart. Source: TradingView

Since working its way up from $6,400 on Dec. 18, 2019, Bitcoin has done a good job of flipping strong resistance to new levels of support. Most recently $8,600 was flipped to support, and today’s move may have turned $9,200 to a new level of support. 

Now that a 2020 higher-high has been set, traders will be watching to see if bulls push higher to flip $9,400 to support which would set a good foundation for Bitcoin to make a fresh attempt at $9,600 and $9,948. 

BTC USD 6-hour chart. Source: TradingView

At the time of writing both the 4 and 6-hour timeframe are showing a tweezer top candlestick pattern which typically hints at a price reversal. The relative strength index (RSI) has also reversed course dropping lower in the overbought region. 

In the event that traders book profit and Bitocin price experiences a mild correction, we will watch to see if the underlying supports at $9,100, $8,900, $8,650 hold up. 

BTC USD 6-hour chart. Source: TradingView

Currently, Bitcoin price has popped above the upper Bollinger Band arm right near the tweezer top. After strong upside moves, it’s not unusual for the price to retrace to the moving average of the Bollinger Band indicator.

If $9,100 and $8,900 fail to function as support, traders might look for a bounce at this moving average which is aligned with the $8,650 support. 

Bitcoin daily price chart. Source: Coin360

The overall cryptocurrency market cap now stands at $256.2 billion and Bitcoin’s dominance rate is 66.3%. Notable gainers amongst altcoins were Cardano (ADA) with a 9.70% gain, Ethereum Classic (ETC) which rallied 10.18%, and IOTA (MIOTA) which notched a 15.92% gain.

Keep track of top crypto markets in real time here

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