SEC says bitcoin funds raise 'investor protection issues'

The U.S. securities regulator on Thursday raised alarm about the safety of bitcoin-themed investments, telling the fund industry they want answers to their concerns before endorsing more than a dozen proposed products based on cryptocurrencies.

A top division chief at the U.S. Securities and Exchange Commission detailed the agency’s concerns about the wild-trading investment in a letter to two trade groups representing fund managers who unleashed a range of proposals for funds holding bitcoin or related assets.

The SEC’s division of investment management demanded answers to at least 31 detailed questions about how mutual funds or exchange-traded funds based on bitcoin would store, safeguard, and price that asset.

They also asked whether investors can understand the risks and how to address concerns that bitcoin markets could be manipulated.

“It shows that they’re going to have to take some time to consider the industry’s responses before they change their minds on it,” said Senderowicz, a partner at Dechert LLP. 

Singapore central bank head hopes cryptocurrency tech will survive 'crash'

The head of Singapore’s central bank said on Monday he hoped the technologies underpinning cryptocurrencies such as blockchain would not be undermined by an eventual crash in the digital money. 

The city-state has been positioning itself as a hub for fintech - or financial technology - but has urged “extreme caution” about buying cryptocurrencies.

“I do hope when the fever has gone away, when the crash has happened, it will not undermine the much deeper, and more meaningful technology associated with digital currencies and blockchain,” said Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS),

Menon added that he would not rule out the possibility of the MAS issuing a cryptocurrency directly to the public but that he was not sure it was a good idea.

Ethereum price surges to record high after almost doubling in value during 2018

Global Stock Markets

The second largest cryptocurrency is experiencing a surge that’s seen its price hit record price levels. Ethereum was briefly worth more than $1200 (£886) after almost doubling in price since the beginning of 2018.

It shot up in value yesterday, before plunging back down to about $1500 this morning.
Ethereum is similar to Bitcoin but uses a cryptocurrency token called ‘ether’.
It also designed to work as a ‘platform’, which means the network which powers it can store information including contracts.

What are cryptocurrencies?

Bitcoin is the most valuable cryptocurrency in the world, with Ethereum in second. But there are more than one thousand other digital currencies.

Most of these new forms of digital money use cryptography to securely record transactions on a kind of permanent ledger that’s called a blockchain.

Cryptocurrencies are designed to be centralised, meaning they are not controlled by state-run central banks. This can allow criminals to operate in relative secrecy, but also allows users to dodge internet censorship.

The alternative currencies are often ‘mined’, which means people are rewarded coins for using their computers to solve the complex mathematical problems needed to enter transactions on blockchains.
Websites like Coinbase allow you to buy and sell cryptocurrencies, although the volatility of the markets means that you need nerves of steel.

Bitcoin increased in price by more than 1000 percent during 2017, whilst the value of Ethereum increased by about 700 percent.

People looking to replicate the success of the first Bitcoin investors are investigating ‘alt-coins’ including Ethereum, Litecoin and Ripple in the hope they can be bought cheaply now and sold for a much higher price at a later date.

The financial giant Bloomberg has just begun delivering bulletins which give investors the price of Bitcoin as well as the three alt-coins – which is a clear indication that bankers are starting to take them seriously. 

Bitcoin, Ethereum and other major cryptocurrencies slip while Ripple briefly surges to third place

European Stock Markets

Ripple briefly retook its place as the third-largest cryptocurrency, with a market value of $47 billion, a milestone it reached earlier this month. 

The digital currency reached the key psychological $1 mark for the first time Thursday, and hit an all-time high of $1.38 that same day. Ripple said Thursday that its digital token was now available on more than 50 exchanges around the world.

 

Alternative digital currency Ripple made some significant gains Friday, despite the wider market for cryptocurrencies seeing a sharp pullback.

Also known as XRP, it soared to $1.24 at 1:14 a.m. ET, and was up 25 percent over a period of 24 hours, according to data from industry website Coinmarketcap. The digital currency reached the key psychological $1 mark for the first time Thursday, and hit an all-time high of $1.38 that same day.

It briefly retook its place as the third-largest cryptocurrency, with a market value of $47 billion, a milestone it reached earlier this month. Ripple pared its gains later Friday morning. Its market capitalization fell bellow that of bitcoin cash, as XRP's price slid to 95 cents by 3:25 a.m. ET.

Interest in alternative cryptocurrencies — known as altcoins — tends to increase when there is too much activity congesting the blockchain network underpinning bitcoin, according to experts. But major altcoins including Ethereum, bitcoin cash and litecoin were also seen trading lower Friday.

Bitcoin cash was surrounded in controversy earlier this week after cryptocurrency exchange Coinbase unveiled support on its service for buying and selling the bitcoin rival. Some accused the venue of insider trading with bitcoin cash trading higher hours before the service launched its new feature.

Coinbase said it is currently investigating these claims, and would "not hesitate" to fire employees if it finds they violated its trading policy.

Meanwhile, litecoin's price fell after its creator Charlie Lee said he had sold and donated all of his holdings in the cryptocurrency. Lee said his sold stake was a "small percentage" of daily volume on the cryptocurrency exchange GDAX and that it "did not crash the market."

Bitcoin futures trading just got a lot bigger

European Stock Markets

The red hot digital currency hit new highs over the weekend -- and it's now got the weight of the world's biggest exchange operator behind it. 

Financial market giant CME Group (CME) launched bitcoin futures trading on Sunday evening in the U.S., a week after a similar move by its smaller rival Cboe Global Markets (CBOE). 

The involvement of top financial institutions in the bitcoin market underscores its growing mainstream acceptance even as government officials, business leaders and economists continue to warn people against investing in it.  

The CME launch "adds considerable legitimacy" to bitcoin trading, said Shane Chanel, an adviser at Australian investment services firm ASR Wealth Advisers.

Bitcoin's price (XBT) hit a record high earlier Sunday before the futures trading started on CME. It climbed to within a few hundred dollars of the $20,000 mark before slipping back. By early Monday, it was trading around $19,000.

Investors were betting it will go higher. The January futures price on CME was about $19,500 Monday morning, down from an earlier high of $20,650.

Futures are contracts that let investors buy or sell something at a specific price in the future. But unlike traditional commodities such as oil or agricultural products, bitcoins aren't physical assets.

And unlike traditional currencies, there isn't a central bank that backs bitcoin. The virtual coins are created on computers using complex algorithms and recorded in a digital ledger.


Bitcoin has had an incredible year. Its price has skyrocketed more than 1,700% since the start of January, partly on the expectation that more and more mainstream investors will begin trading it.

That's prompted some high-profile figures in finance and economics to sound the alarm, cautioning that the currency's boom is simply a huge, speculative bubble.
But their warnings contrast with moves like those of CME and and Cboe to start bitcoin futures trading.

CME is home to about three times as much trading per day than Cboe. With CME's futures contracts, investors have to trade bitcoin in blocks of five, versus just one at a time with Cboe.

The two also price their bitcoin contracts in different ways. Cboe bases its price on one exchange, Gemini, whereas CME takes an average from multiple exchanges.


ASR's Chanel said that the launch of futures on CME should eventually help iron out some of the wild gyrations in the price of bitcoin.


And more big names in finance are also planning to get involved.New York's Nasdaq is expected to launch its own bitcoin futures trading sometime next year.

Bitcoin fever exposes crypto-market frailties

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.

Winklevoss twins say bitcoin will increase another 20 times amid growing warnings of crypto ‘mania’

AS THE digital currency hits record highs, there are warnings of “mania” — some people are even taking out mortgages to buy bitcoin.

THE twin brothers dubbed the world’s first “bitcoin billionaires” have predicted the controversial digital currency could increase in value by another 20 times from today’s levels.

“We think bitcoin is gold 2.0,” Cameron said. “It’s a store of value, so today it’s about a $US300 billion market cap, gold is at $US6 trillion, so we think it could very well go up another 20 times from today.

Bitcoin has increased in value by more than 1500 per cent this year to reach a market capitalisation of more than $US280 billion, in what UBS describes as the “bubble to end all bubbles.

The launch of bitcoin futures, which allow investors to bet on the rise or fall of the currency, was widely seen as a success despite many major banks keeping their distance and the CBOE twice being forced to suspend trading due to major price swings.

Meanwhile, the US Securities and Exchange Commission has also warned investors against bitcoin and other cryptocurrencies, particularly those offered to investors under controversial initial coin offerings (ICOs).