Weekly Roundup: BTC Slides, Recovers, Antonop Anti-ETF, Venezuela’s New Bolivar
In this week’s edition, we talk about BTC’s recent dip back into sub-$6000 territory, why its somewhat alarming to a few financial experts, explain why the all-but-certain Bitcoin ETF might not necessarily be such a great thing for bitcoin, and discuss why Venezuela’s state-backed petro is going to be at the center of a make-or-break moment in the country’s recently-troubled history.
Bitcoin Drop Creates Panic, Makes Up Losses
After suffering a significant, panic-inducing drop on Tuesday, the price of BTC rose back up above $6400 to end the week nearly flat, proving the market still has a distaste for going below the $6000 mark. A few altcoins showed some particularly inspiring resilience, bouncing back from months-long steady declines on renewed optimism that markets were only down and by no means out. Some of the biggest gainers over the last week were Ontology (ONT) (69%), Nano (NANO) (62%), VeChain (VET) (58%) and Populous (PPT) (29%). In stark contrast to last week’s sea of red, several coins managed to post gains over the last 7 day period, cautiously signaling that the worst of this year’s bear market may finally be coming to an end.
Bitcoin’s high volatility remains worrisome as intra-day swings of hundreds of dollars are still quite common. On CNBC, money man Jim Cramer went so far as to declare that “the tide has turned against bitcoin” after it briefly sank below $6000 earlier in the week. Cramer stopped short of saying that bitcoin was dead or out of the picture entirely but did lament on how far it had continued to fall during the course of 2018 thus far. Also not bullish on bitcoin’s immediate future is Coinbase CEO Brian Armstrong, who remarked in a recent interview with Bloomberg, “I think it will be quite some time before you cross the street to Starbucks in the U.S. and pay with crypto,” in spite of the growing trend of BTC adoption among businesses worldwide. Armstrong also made the estimation that only about 10% of all cryptocurrency is used for real-world activities, with the remaining 90% tied up in speculative ventures like trades and long-term investments.
Antonopoulos: Bitcoin ETF “A Terrible Idea”
Declaring their stance against the proposed Bitcoin ETF is media personality and bitcoin expert Andreas Antonopoulos, who believes such an idea goes against the core principles of bitcoin. Antonopoulos is a widely acclaimed author, public speaker and general evangelist of bitcoin, first rising to prominence in 2013 when he appeared in an episode of the Joe Rogan Experience podcast. In 2014, Antonopoulos came to the aid of Dorian Nakamoto after he was mistakenly outed by Newsweek as being the inventor of bitcoin, starting a bitcoin fund to assist him and his family deal with the negative fallout created by the false story. In a Q&A video on Patreon, he explained his case why he didn’t believe the ETF was a good idea, though admitted it will probably happen anyway.
“ETFs fundamentally violate the underlying principle of peer-to-peer money, where each user is not operating through a custodian, but has direct control of their money because they have direct control of their keys. Your keys? Your bitcoin. Not your keys? Not your bitcoin. An ETF is a multi-billionaire dollar ‘not your keys, not your bitcoin’ vehicle.” – Andreas Antonopoulos
Among the expert’s reasoning as to why he was against it, Antonopoulos said the ETF would be “damaging to the ecosystem” of bitcoin. Since such an ETF would be required to hold as much bitcoin as it was creating a market capitalization value for on the stock market, this would take a sizeable chunk of bitcoin out of circulation, which would sit dormant in addresses controlled by the ETF managers while its dollar value was traded as shares.
Bitcoin Q&A: Why I'm against ETFs https://t.co/8mQtKJgy0L
— Andreas M. Antonopoulos (@aantonop) August 15, 2018
Venezuela Pegs New Currency to Petro
In an unprecedented turn of events, the government of Venezuela, facing economic hardship after U.S.-led sanctions and 100,000%+ inflationary woes, is re-valuing their national currency, chopping off 5 decimals from the bolivar and tying the value of its replacement (to be called the strong bolivar) to its state-led cryptocurrency, named the petro (PTR). The move is accompanied by a statement from the president promising that the country’s minimum wage will be raised to the price of ½ petro per month, or approximately $30.
Covered at length in an earlier article on CoinClarity, the petro in theory is “backed” by Venezuelan oil reserves and was sold during an ICO process earlier this year, of which president Nicolas Maduro claims was a great success, with $5 billion in ICO sales. Maduro blames the United States – a country which has expressly prohibited its citizens from taking part in the petro ICO – for orchestrating the collapse of the bolivar and contributing to the country’s financial downfall. The idea is that by tying the country’s fiat currency to a cryptocurrency, it will be made more stable and less prone to manipulation by outside forces.
In theory, the petro will be readily accepted by any number of Venezuelan businesses, easy to purchase through the country’s state-approved cryptocurrency exchanges and represent a new paradigm in personal finances to be enjoyed by every citizen within the country. The blockchain record of the coin, a token on the NEM network, paints a different picture, with only $100,000 – $200,000 worth of tokens purchased during the ICO, and zero of the tokens actually transferred to ICO participants. What remains clear is that the next few months will be a very interesting time in history for the struggling nation, with Venezuela emerging as participants of the first state-sponsored crypto-revolution in finance or hosts of the biggest ICO fraud of all-time.
In Case You Missed it
This year at CoinClarity we decided to start engaging in interviews with individuals who have direct experience in the field of cryptocurrency, in a variety of capacities. For those who are perhaps not regular visitors of the website, we recap and link for you here a few of the interviews we’ve conducted over the past few months.
Ben Arnold – Cryptocurrency Investor. Residing in sunny Honolulu, Hawaii, Ben makes frequent trips to Las Vegas to fulfill a semi-professional career as a part-time gambler. Ben is the kind of guy who likes to bet big and go home big — a strategy that paid off handsomely with some well-timed investments he made in bitcoin and ether in early 2017. Ben’s take of success represents a category of every-day, average Joe investors who managed to get in at just the right time and get out before holding on for just a little bit too long.
Colin Goltra (part I and part II) – Coins.ph Head of Cryptocurrencies. American by birth and Filipino by blood, Colin’s company, Coins.ph, represents an enterprise that is successfully using bitcoin for what it was originally intended by Satoshi Nakamoto: improving the lives of a general population by cutting out costly financial middlemen. Over 3% of the Philippines national population has a Coins.ph account, making it one of the most penetrating bitcoin wallet providers to ever be developed. During our two interviews with Colin, he describes what makes Coins.ph so successful and valuable to its users.
Bruno Kucinskas – Charity founder, scam buster and forum legend. Bruno got his start as a Bitcoiner in early 2011, shortly after Bitcointalk’s founder Satoshi Nakamoto disappeared from the public eye. He has become firmly entrenched as a staple in the forum’s community in years since, having a celebrated non-professional career of busting cryptocurrency related scams of all kinds. We talked to him about how he got started, his views on bitcoin, his thoughts about Satoshi Nakamoto and also the origins of his own up-and-coming ICO product.
Also in the News
- A small North Carolina startup has invented a way to get bitcoin to people without them having to enter banking information or even transfer money. A new app called Lolli distributes small amounts of bitcoin to registered users in exchange for shopping at participating retailers, including Bloomingdales, Walmart, Best Buy and ClassPass. The company advertises its service as “mining by shopping,” with the goal of bringing crypto to people who find it too difficult or daunting to acquire it through more traditional means.
- In another encouraging tale of bitcoin’s increasing rate of adoption, a report by app research firm Sensor Tower and Nomura Instine signals that the bitcoin-friendly Square Cash app is now a more popular peer-to-peer payment option than long-standing Venmo. Square’s Cash App now boasts 33.5 million total downloads, exceeding Venmo’s 32.9 million. Square had a successful July that saw a download rate of its app three times faster than Venmo.
- Last week, the state of Hawaii was the first to experience a new type of bitcoin scam where businesses are receiving phone calls from aggressive fraudsters claiming to be from electric companies, demanding payments in bitcoin for fictitious, outstanding electricity bills. In the scam, businesses are called by either a live person or a pre-recorded message, threatening to immediately shut off their power if bitcoin is not sent to a provided bitcoin address. Local electric companies on the Big Island of Hawaii issued warnings to customers after a number of businesses had already fallen prey to the brazen scam. While its worth noting that utility companies never engage in such behavior – especially demanding bitcoin during the course of it – the scammers were convincing enough to have already bilked several customers out of thousands of dollars worth of unnecessary payments.