Bitcoin Regulation Fears Tank Markets – World Governments are in for a Big Surprise.
Cryptocoin markets are plummeting again. Bitcoin regulation fears tank markets every time. Here we go again. This time it’s South Korea considering a 24.2% tax on profits generated by South Korean exchanges as Indonesia bans cryptocoin transactions altogether. The government of South Korea is either trying to eliminate the use of cryptocoin through these punitive taxes or attempting to profit by them. Either way, the outcome will not go the way they want. I’ll explain why shortly.
Indonesia is altogether moronic for banning cryptocoin transactions entirely. Most Bitcoin transactions originate from tourists and most happen in Bali, a travel destination. The long story short; tourism income goes down which will impact the entire Indonesian economy from shops to restaurants to the government itself through a drop in sales – and tax revenue.
Regardless, Bitcoin regulation fears tank markets will soon be a thing of the past. With decentralized cryptocoin exchanges on the rise it’s just a matter of time before all the government cryptocoin regulations in the world won’t make a lick of difference. Couple this with the upcoming Bitcoin lightning network and you have a global digital currency with near-instant transactions in a totally decentralized environment.
The end result will be any given government will be left high and dry with no way to regulate Bitcoin or any other cryptocoin and no way to generate any meaningful tax revenue on day-to-day transactions. The day will soon come when headlines like “Bitcoin Regulation Fears Tank Markets” will be relegated to the history books as Bitcoin and other cryptocoins with real-world usefulness will drive what we buy, how we pay our bills including buying real estate and cars even more than now. The single biggest benefit as I see it is the elimination of market uncertainty that led to the cryptocoin bloodbath last week and the market tanking we’ve seen so far today.
Coinbase Having Problems With PayPal – Technical Glitch or PayPal Policy?
Yesterday I tried to move some funds from Coinbase to PayPal when I discovered Coinbase having problems with PayPal. I had made a Coinbase transfer to PayPal just a few days earlier which is what surprised me. I tried it 2-3 times and no go.
That ended up being a good thing as the price of Bitcoin continues to plunge. So Coinbase having problems with PayPal ended up being a good thing in the short term. Remembering reading somewhere that PayPal was cracking down on not only cryptocoin transactions but also crowdfunding transaction I decided to dig deeper. And guest what I found?
“You may not use the PayPal service for activities that involve currency exchanges or check cashing businesses”. I suspect this is why Coinbase having problems with PayPal has become a thing. A full tread of the Coinbase PayPal thing is here. I’ve been using PayPal for quite a while now to quickly transfer funds of out of Coinbase to my bank account via PayPal. With PayPal’s new 30 minutes-or-less transfer of funds to your bank account via a debit card for just 25 cents, I was using it all the time.
Now with Coinbase having problems with PayPal (official acknowledgement below) coupled with the discovery of PayPal’s own policy it seems possible that direct access between PayPal and cryptocoin exchanges is coming to an end. On the other hand, Coinbase has had problems with PayPal before which ended up being resolved as discussed on Reddit.
In light of recent push back from banks towards their customers in handling cryptocoin transactions my sense of suspicion surrounding Coinbase having problems with PayPal is understandable. I certainly hope this problem is technical in nature and not a sudden policy enforcement issue with PayPal.
Bitconnect Behind the Curtain – What Bitconnect Did That Left Cryptocoin Investors Shocked, Sad, Angry and Out for Blood.
Before we take a look at Bitconnect behind the curtain we need to look at the public positioning of Bitconnect.
Introduction – What Is (Was?) Bitconnect?
In essence, the BitConnect service claimed to convert Bitcoin (BTC) into BCC (their proprietary coin) and pay holders of BCC interest earned from their trading bot. It should be said that the actual existence of such a bot is dubious at best. It has been said that Bitconnect itself controlled the supply and the price of BCC. If Bitconnect wanted the price up or down on any given day they put the word out to their promoters and other insiders who would either pump or dump BCC as needed which would dictate the returns to be paid the next day.
The interest rates grabbed everyone’s attention and with good reason; claims run the range from 1% to as much as 4% PER DAY depending upon how much the investor loaned. The premise behind the persuasion runs along the lines of “we’re better cryptocoin investors than you so trust us with your Bitcoin and you’ll make money.”
This leads to the first litmus test: If something sounds too good to be true it probably is. Critical thinking skills should have been applied by every prospective investor prior to putting their trust in Bitconnect.
Steve Dell, writing for Medium framed this perfectly in his piece “Bitconnect Explained”:
“An speculative investor should ask is: Why? If you have this incredible ability to trade an asset in such a way that you have virtually no risk and tremendous upside, why would you allow little old me to reap the benefits of that? If you’re able to get 1% per day on $100,000, in one year you’d be looking at close to $4,000,000. Their method of trading would truly be revolutionary…
…If you could generate that kind of income passively, would you ever consider trading?”
Steve Dell’s reasoning resonates with my own when it comes to Bitcoin cloud mining; if you can make so much money on your own why invite anyone else to share in your riches?
Bitconnect Promoters – Who Are They, What Did They Do and How Much Did They Get Paid?
Some colorful names of Bitconnect promoters on this list:
Cryptogirl, Crypto Clover, Jeti Knight, crypto Nick, Trevon James, Glenn Arcaro, Craig Grant, Ryan Hildreth and Joey Rocket among others. Sunny Decree was a promoter then decided it was a scam months ago and stopped promoting. Side notes on Joey Rocket – There is a Joeyrocket LLC out of Tempe Arizona. Joey Rocket went the extra mile with his Bitconnect pitch videos having them translated to reach prospective Bitconnect investors and/or promoters in Malaysia and Germany.
All of these promoters are fascinating subjects. Perhaps Crypto Nick a little bit more interesting than the others in the sense that he’s a millionaire and has yet to celebrate his 18th birthday. This YouTube interview is eye-opening…
Bitconnect promoters were essentially on the payroll getting what is believed by some to be a fixed amount of BCC PLUS a generous weekly marketing budget of .5 Bitcoin (that’s $7,500 give-or-take) for weekly advertising which was largely, if not entirely, spent on YouTube advertising promoting their videos. Interestingly, nearly all of the videos created and published by Bitconnect promoters have been deleted right around the time Bitconnect shut down their lending operation. It seems they had an exclusive view of Bitconnect behind the curtain before anybody else.
Other sources believe they were paid a percentage of every dollar they brought in. I think the percentage-based model is the one they were paid by as it makes the most sense and perfectly explains all of the enthusiasm the promoters exhibited in talking up Bitconnect.
What is certain is that top promoters of Bitconnect behind the curtain enjoyed yacht parties, posh luxury cars made by Porsche, Aston Martin and yes Lamborghini as well as all-expenses-paid junkets to Thailand.
How did it work? The promoters have (had?) their affiliate links which tracked all of their activity which was the basis of them getting paid through bringing in new Bitconnect investors. In turn, the promoters recruited people to work under them. This points to a classic MLM (multilevel marketing) scheme. The promoter on top of the pyramid collected a percentage of all of the money the promoters under them brought in plus the cars, trips and parties and who even knows what else?
The Bitconnect Impact – How Much Did They Take? How Much Did They Make?
Since it seems Bitconnect controlled the price and the supply of BCC there’s no way to be sure of how much money was made by them and lost by investors. Estimates range from $600 million to over $2 billion as illustrated in these charts:
How many dollars are we talking about here? We may never know for sure. Certainly millions and quite possibly billions. If we’re fortunate we’re getting a closer look at Bitconnect behind the curtain one day.
The Bitconnect Shutdown – Shattered lives, broke and broken families coupled with suicidal thoughts
I documented the Bitconnect shutdown a few days ago. The official word is that Bitconnect will redeem each BCC coin held for $363 per coin. The thing is, the cryptocoin markets tanked the BCC price to the degree it plummeted in value by 90% the same day the Bitconnect shutdown news broke. Indeed, some suspect the plunge of most coins on the cryptocoin markets (Bitcoin, Ethereum, etc.) were impacted by the Bitconnect disconnect.
What I can only add is that the tales of tragedy and loss are profound and almost indescribable. A lot of people have lost money. Some are now completely destitute, others simply depressed over losing money while a few are still in denial and are hoping for a BCC price rebound. That seems increasingly unlikely as BCC was about $30 three days ago and is $18 today. Husbands are fearful of telling their wives, businessmen are facing bankruptcy and some have even admitted to contemplating suicide.
After taking a good long look at Bitconnect behind the curtain nobody should be holding out hope of getting anything near their money back except through a successful outcome of a Bitconnect class action lawsuit.
Who Owns and Runs Bitconnect?
Here’s where we try to see Bitconnect behind the curtain. In something akin to the movie “Catch Me If You Can” in the sense it’s difficult bordering on the possible to identify with certainty who is the owner/are the owners of Bitconnect. The best research we’ve seen so far was done by “The Bitcoin Informant”. His YouTube video does an excellent job of unearthing critical documents and connecting important dots. I would take the references to the Illuminati with a grain of salt but otherwise respect the excellent research he has performed….
Here’s another excellent video with impressive global research from England to Indonesia with additional reach into OneCoin while drawing parallels…
The Bitconnect saga is still unfolding. The entire Crypto Capers team is on this along with a panel of former Bitconnect customers and cryptocoin experts compiling and supplying us with all of their research. We’ll update you as news comes in.
Electroneum Joins HitBtc Exchange – Expanded Reach of This Unique Cryptocoin to Attract New Investors
Cryptocoin investors spoke and the powers that be at Electroneum responded leading to the good news that Electroneum joins HitBtc Exchange. ETN fans, advocates and investors have been clamoring to see Electroneum listed on more exchanges to make this unique mobile cryptocoin available to a much wider pool of cryptocoin investors.
When Electroneum entered the cryptocoin scene last they instantly gained attention. They quickly acquired a userbase of 750,000 with a c.$700m market cap yielding 2200% returns to their initial 120,000 investors. To date, over $513m of Electroneum has been traded which is astonishing when you consider that ETN has been listed on just one exchange up until now for just about two months.
What is Electroneum?
ETN is an end-to-end mobile payment solution. Mobile users can simply purchase ETN and either HODL it, sell it or spend it (which is why Electroneum joins HitBTC exchange is even more important news). The Electroneum team has developed a unique mobile mining app, currently in beta, which will enable users to mine ETN coins right from their phones in the background. These coins will appear in their wallets for use in making mobile payments. What’s even more exciting is plans for ETN acceptance by various merchants. Pay-by-phone is increasingly being adopted by retailers and other merchants and the Electroneum team has big plans for this new method of payment.
We previously announced ETN’s partnership with Xius and we expect to hear many more announcements from Electroneum heralding good news for ETN investors, adopters and users. As I always say, one of the key factors to consider before investing in any cryptocoin is look at how useful the coin is or could be. Electroneum certainly is useful in real-world applications and I anticipate this only to continue and expand.
As Electroneum joins HitBtc Exchange there are details and technical matters which are currently being handled. As such, there is no firm date as to when ETN will be traded on HitBtc.
Bitconnect Class Action Lawsuit – Thousands feel cheated and the lawyers have mobilized
As the saying goes “Well that was fast.” It all started two days ago when Bitconnect shut down its Bitcoin lending platform. That was when Bitconnect class action lawsuit talk started.
As chaos erupted across the cryptocoin world a new Facebook group was created that same day; The Bitconnect Class Action Lawsuit Group
Jon Alexander took the bull by the horns and is leading the charge to mobilize as many people as possible to join him in a Bitconnect class action lawsuit.
His efforts are bearing fruit. In less than 48 hours over 1,000 people have joined the group with experiences and impressions that run the gamut:
Most people are understandably furious; they feel they were misled, manipulated and cheated. The term “Ponzi scheme” is used constantly.
Surprisingly, a few people stated they knew it was a Ponzi scheme but still wanted to make money with Bitconnect.
The tales of losses are profound. Several posts advertising the USA’s suicide hotline were posted. The saddest tale of Bitconnect loss seems to be this one…
Then there’s the other side of the coin — people who are holding out hope that Bitconnect will come back…
They are HODLING their BCC in hopes they will get the $363 USD per coin promised as the price currently floats at around $30.
Astonishingly, some people are doubling down on Bitconnect and buying even more BCC at low prices hoping they’ll make a tidy profit.
One fellow wants to see North Carolina and Texas sued, questioning the legality of the cease and desist letters they issued to Bitconnect.
The prevailing sentiment is that Bitconnect robbed people blind and while there is a glimmer of hope of recovering lost money, real hope grows as the Bitcoin class action lawsuit gains momentum. Much more than just a pipe dream or fanciful daydreaming, a Bitconnect class action lawsuit seems very real. Just yesterday the law firm Silver Miller has announced their intention to organize and file a class action lawsuit on behalf of NOT ONLY Bitcoin investors who lost money but indeed ANY CRYPTOCOIN INVESTOR WHO FEELS THEIR INVESTMENTS LOST VALUE AS A RESULT OF THE BITCONNECT SHUTDOWN.
Holy shit, boys and girls.
The Bitconnect class action lawsuit story has just started. We’ll keep you updated on this as the story unfolds.
First Bitcoin Futures Contract Expires as Bitcoin Rises
Is it a coincidence or a convergence of market forces that the first Bitcoin futures contract as Bitcoin rises? It’s difficult to be sure as Bitcoin historically dips in January only to bounce back higher than ever. What complicates this review of Bitcoin history is the factor Bitcoin futures may play. If you step back and consider all of the dynamics in play, it might not be a coincidence that the first Bitcoin futures contract expires as Bitcoin rises – on the same day.
Consider these points:
Back in November 2017 the news of Bitcoin futures markets on the CME and CBOE breaks. Right after that, hedge fund managers and affluent investors start buying up Bitcoin which drives it near it’s all time of high of $20,000 knowing full well they would be shorting Bitcoin on the futures market.
Then we have the the first Bitcoin futures contract coming in at around $15,000. Bitcoin whales then start pumping up the price of Bitcon to all time high and making truckloads of money in the process and then start selling BTC and taking their profits which leads to a panic run with BTC selloffs coming in from every direction. The hedge fund managers and other players are very happy to see this because they had already shorted Bitcoin on their futures contracts COUNTING ON THE FACT the price of Bitcoin would plunge. Which it did.
A lot of people would rightfully call “bullshit” on such market manipulations but at the same time it can’t be denied it’s brilliant. Plays like this happen on the stock market all the time. I’ve personally known investors sitting on huge blocks of stocks they own in any given company SHORTING the sale of that same stock BETTING it will go down. Sounds crazy, right? But it isn’t if you run the numbers. They’re covering their bets both ways.
BUT WAIT THERE’S MORE…
After the dramatic plunge of Bitcoin price the past 48 hours every investor worth his salt knows there is an amazing buying opportunity on Bitcoin and other coins at bargain basement prices. So investors big and small — whales and minnows alike — go on a cryptocoin buying frenzy leading to prices driving up across the board. Our founder and editor-in-chief Howard Sherman documented this earlier today.
While it is seldom clear WHY Bitcoin pricing and other cryptocoin values for that matter can move so dramatically so quickly I think we have a viable theory here that it’s no small coincidence that the first Bitcoin futures contract expires as Bitcoin rises.
Here’s an alternative theory to explain the historical price dips and highs in January; Wall Street executives always get their bonuses in mid January. Is the sudden price spike the result of Wall Street players buying Bitcoin now that they have received their bonuses? Is it the new Bitcoin futures markets? A mix of both and perhaps other forces at work as well? Nobody can be sure.
What is certain more than ever is that Bitcoin has become, in every sense, the new gold.
Bitcoin Rebounds Altcoins Follow – Bitcoin and Many Other Cryptocoins On The Rise
What better news could anyone wake up to than to see that Bitcoin rebounds altcoins follow in the wake. This is a common pattern which clearly establishes Bitcoin – yet again – as the king of cryptocoin. In as much as Bitcoin rose some 25% off its low yesterday I was astonished my portfolio of altcoins (LEND, DGB and DRGN) was up some 50%! “I love the smell of good news in the morning.”
When Bitcoin rebound altcoins follow should be an established fact for any cryptocoin investor, even the novices. Look at almost any chart and overlay the digital currency of your choice alongside Bitcoin and you will see an unmistakable pattern; Bitcoin always leads the way. Fellow staff writer Nat Roth, a veteran of various financial markets, agrees with me. Look at a pairing chart of Ripple’s XRP and BTC and you’ll see this to be true yet again…
So when we say when Bitcoin rebounds altcoins follow along we speak from experience with the facts to back it up. Cryptocoin investors, in my opinion, should always keep some BTC in their portfolio as a barometer measuring the overall cryptocoin market. Whenever you see a Bitcoin price swing – in either direction – you’ll have advanced warning of what’s to come next in any given coin,
The takeaway from the events of the past twelve hours is to HODL. Anyone who sold off yesterday is probably kicking themselves today. Investing in digital currencies is never for the faint of heart but you can always be sure of one canary in the coal mine; Bitcoin. With every cryptocoin investing decision you make – whether to buy or to sell – never forget that when Bitcoin rebounds altcoins follow. From everything I’ve seen it may as well be as much a natural law as the law of gravity.