SEC gives OK to social media platform to issue stablecoin without registering as a security

The letter states the regulatory agency “will not recommend enforcement action” against a platform issuing a digital currency capable of being converted to fiat.

Image courtesy of CoinTelegraph

            NOV 19, 2020

The U.S. Securities and Exchange Commission, or SEC, has issued a rare no-action letter in response to a request from a blockchain-backed platform over the issuance of a digital asset.

The SEC letter issued on Nov. 19 says that its Division of Corporation Finance would “not recommend enforcement action” against avatar social platform IMVU issuing its VCOIN digital asset under certain conditions. The commission will allow the firm to offer the token without registering it as a security.

Crypto firms issuing their own tokens often have to abide by the SEC’s regulatory framework, which has proved contentious. The classification of a "security" is for assets dependent on the work of a third party to gain profit. To abide by the no-action letter, IMVU needs to keep its new stablecoin from looking like an investment opportunity, which, for example, Facebook got tripped up doing with its Libra stablecoin.

As part of the terms of the staff recommendation letter, the SEC said IMVU would still be subject to Know Your Customer and Anti-Money Laundering regulations in addition having “specified limits” on VCOIN purchases, conversions, and transfers. The letter stated IMVU would need to make the token “continuously available in unlimited quantities and at a fixed price” of $0.004, and would not “promote or support listing or trading” of the token on any third-party platform. In addition, the company could not use proceeds from VCOIN sales to upgrade its network before the tokens are available.

However, in an apparent first, the regulatory body stated that it would not recommend enforcement action against IMVU for making VCOINs available for their “intended purpose." According to the platform, users can buy, earn, and transfer the tokens off IMVU to convert to fiat.

The letter expresses the Commission’s staff opinion on enforcement, and is not a legal determination. However, such no-action letters have only been issued twice for crypto firms. In April 2019, the SEC confirmed it would not recommend enforcement action against aircraft company Turnkey Jet in the sale of its TKJ tokens.

A few months later, the SEC issued a similar letter for an 8th grader who wanted to release tokens for her crypto gaming company Pocketful of Quarters. But both of those tokens were approved on the basis of being much more siloed than VCOIN, as they don't allow tokens to go back into fiat.

“This no-action letter is meaningful because unlike the other two, this is the first time an ERC-20 token is being blessed by the SEC — it’s saying ‘hey, take it off platform,’” John Burris, IMVU Chief Strategy Officer said to Cointelegraph. “It’ll be allowed to go into the wild, so to speak.”

While Pocketful of Quarters and Turnkey Jet both had very limited use cases, IMVU is already an established platform, with virtual transactions used by roughly 7 million players monthly. Burris theorized that the SEC’s decision was based on establishing a “real proof case” for the broader crypto and blockchain space:

“Our users are already very comfortable with the use case of using cash to purchase a digital currency and then spending that with each other on the platform. We’re very confident in adoption.”

Because the SEC letter says the VCOIN tokens can’t be transferred to third-party platforms, IMVU users will be able to send them out of the virtual world for a 10% transaction fee and into a private wallet, where the company said it will buy them back as requested. VCOIN is definitely not Bitcoin (BTC) — it will be sold at a fixed price and the token supply can be increased later on.

IMVU is planning to start selling the token in the virtual environment starting in January.

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Original article posted on the CoinTelegraph.com site, by Turner Wright.

Article re-posted on Markethive by Jeffrey Sloe

Analyst Who Called March’s V-Shaped Reversal Says Bitcoin Dip Is Inevitable

By Cole Petersen – November 18, 2020 in ETH Reading Time: 3min read

Bitcoin has undergone a strong rally over the past few days as the coin has continued to see vast buying interest. The coin pushed as high as $18,500 last evening, though quickly dipped back into the $17,000 region as selling pressure suddenly appeared. There was a vast amount of selling pressure on the order books of top exchanges at $18,500.

Analysts believe that a deeper drop for Bitcoin is on the horizon, even as it manages to hold the low $17,000s. Bitcoin should hold $17,100 on a daily basis to maintain the uptrend, some have said over the past few days.

Bitcoin Could Face a Dip, Says Historically Accurate Analyst

The same trader that predicted Bitcoin would see a V-shaped reversal to $10,000 and beyond during the March crash recently said that a drop is somewhat inevitable for the cryptocurrency:

“My work here is done I sincerely hope we reach ATH, as I will lay off more spot exposure and load up on dry powder to consume a dip It will come eventually, the question is, will you be ready for it?”

He predicted the move to $18,200 a number of days ago in a chart that indicates a drop to $15,000 is likely.

Chart of BTC's price action over the past few years with an analysis by crypto trader Bitcoin Jack (@BTC_jackSparrow on Twitter). Source: BTCUSD from TradingView.com (Click image for larger view)

Long-Term Trend Still Positive

The long-term trend of Bitcoin remains positive despite whatever downside may exist in the short term.

Willy Woo, a prominent cryptocurrency on-chain analyst, recently said that the Realized Price of Bitcoin is shooting higher, which is good for its trajectory:

“Realised Price estimates the average price the market paid for their BTC. Now at its steepest slope for this cycle, meaning capital influx into  #Bitcoin is at its highest rate since the last bull market. (Higher than last year’s $4k-$14k move; the current move is more organic.). For the sake of this comment I’ll define “organic”. Organic price action happens when BTC price tracks closely with investor capital entering and leaving. When it’s inorganic BTC price is dominated by short term derivative traders.”

(Click image for larger view)

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Analyst Who Called March's V-Shaped Reversal Says Bitcoin Dip Is Inevitable

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The original article was written by a Guest Author and posted on NewsBTC.com.

Article reposted on Markethive by Jeffrey Sloe

BTC Surges To $18.4k, Dumps to $17.2k as $0.8B is Liquidated in 24hrs

John P. Njui   •   BITCOIN (BTC) NEWS   •   NOVEMBER 18, 2020

Quick take:

• Bitcoin broke the $17,100 resistance level
• Bitcoin then zoomed past $18k to post a 2020 high of $18,474 – Binance rate
• BTC soon fell hard to $17,200
• The intense price action resulted in over $800 million in liquidations across the crypto markets

The last 24-hours have been an exciting ride for Bitcoin (BTC) traders and investors. Late yesterday, the King of Crypto was staring at a 2-year-old resistance level at $17,100 which many thought would be the proverbial brick wall for Bitcoin. However, BTC overcame this area with ease, zooming past $18k, and setting a 2020 peak value at $18,474 – Binance rate. But as soon as Bitcoin posted the 2020 peak value, BTC soon dropped fast and furious to $17,200.

Over $0.8 Billion in Liquidations in 24 hours

This means that in the last 24 hours, Bitcoin has pumped by 11% and also dumped by 7%. The quick volatility has resulted in over $0.8 Billion in liquidations for both long and short positions.

The team at ByBt.com captured this feat and shared it via the following tweet. From the tweet, it can be observed that a total of $805.69 Million in liquidations occurred in the last 24 hours.

$617M in Bitcoin Liquidations, $88M in Ethereum

Out of the $805 Million in liquidations, a huge chunk of the damage affected Bitcoin traders. According to ByBt.com, Bitcoin liquidations added up to $617.55 million. This amount is 76% of the total. Additionally, Ethereum traders who were over-exposed were liquidated to the tune of $88.38 million.

Below is a screenshot providing a breakdown of the aforementioned $805 million in crypto liquidations.

(Click image for larger view)

What Next for Bitcoin and Altcoins?

In terms of what comes after the last 24 hours of market excitement, Bitcoin could very much be gearing up for another attempt at the $18,400 level as it guns for the elusive $20k. If Bitcoin succeeds in zooming past $18,400 as it did $17,100, high chances are, that it will proceed to 2017’s all-time high value.

However, Bitcoin has been in overbought territory since breaking $15k. This fact was pointed out by both Timothy Peterson of Cane Island Alternative Advisors and MagicPoopCannon. Therefore, Bitcoin could have begun a correction that could take BTC to $14k.

With respect to alt-coins, their future is tied to that of Bitcoin. Therefore, BTC need not be extremely volatile in either direction for them to thrive.

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Original article posted on the EthereumWorldNews.com site, by John P. Njui.

Article re-posted on Markethive by Jeffrey Sloe

One Of The Richest Men In The World Just Invested In Bitcoin

By Brenda Ngari – November 18, 2020

The world’s 166^th and second wealthiest businessman in Mexico Ricardo Salinas Pliego revealed that he has invested 10% of his liquid portfolio into Bitcoin.

“Many people ask me if I have bitcoins, YES. I have 10% of my liquid Portfolio invested.”

Salinas Pliego shared a video showing banks throwing out huge amounts of paper money in trash bags in a Latin Country to depict how worthless government-issued paper money has become.

“To start with #Bitcoin, I share a video taken in a Latin country where banks throw money away (paper money is worth nothing) that is why it is always good to diversify our investment portfolio. This is inflationary expropriation.”

The video specifically points to Venezuela’s hyperinflation status, with bankers throwing out the country’s official currency Bolivars issued in 2016 and 2017. Venezuela later introduced the bolivar Soberano (sovereign bolivar, BS) in August 2018. Currently, Bs 685,000 are equivalent to 1 US Dollar.

At a net worth of $11.7 billion, Salinas Pliego is the only Mexican billionaire who has benefited from the Coronavirus-induced economic crisis attributed to his family’s 75% share in the lending and retail appliances businesses.

Salinas: Bitcoin Protects Citizens from Government Expropriation

The Billionaire recommended the Bitcoin Pattern as the best book for investors to learn about bitcoin and its importance in protecting their wealth from currency debasement.

“Today, I recommend THE BITCOIN PATTERN, this book is the best and most important to understand #Bitcoin. Bitcoin protects the citizens from government expropriation.”

Expropriation occurs when governments claim privately owned property against the wishes of the owners, for the good of the public. In countries like Turkey, high inflation has previously led to the forceful claiming of personal wealth stored in Banks by citizens.

As expected, the news stirred a reaction from Crypto Twitter, with Bitso, a Mexico-based cryptocurrency exchange offering to help the billionaire with further investments in crypto.

Pliego also acknowledged the role that Grayscale has played in the crypto market for institutional investors interested in Bitcoin. He said that Grayscale’s Bitcoin Trust Fund which started in 2016, has gradually contributed to the growth of the crypto market.

The billionaire stated that the remaining 90% of his wealth is invested in precious metals. Bitcoin Investor Pierre Rochard suggested to the billionaire to consider more investment in Bitcoin.

“BTC will outperform precious metals miners over the next 10 years.”

Pliego also Chairs TC Azteca, which is the second-largest media company in Mexico and the world’s second-biggest producer of Spanish-Language programming.

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DISCLAIMER

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

The original article written by Brenda Ngari and posted on ZyCrypto.com.

Article reposted on Markethive by Jeffrey Sloe

Ray Dalio admits he 'might be missing something' about Bitcoin as it surges past $17K

“If I’m wrong about these things I would love to be corrected,” said Dalio.

Image courtesy of CoinTelegraph

            NOV 17, 2020

In a Twitter thread posted on Tuesday, Dalio stated he believed that Bitcoin (BTC) was not an effective medium of exchange nor a store of value due to its volatility. He also asserted that governments could outlaw crypto assets if they became a threat to fiat currencies. However, he also admitted he “might be missing something” and invited others to chime in with their explanations.

“I can’t imagine central banks, big Institutional investors, businesses or multinational companies using [Bitcoin],” said Dalio. “If I’m wrong about these things I would love to be corrected.”

Dalio’s remarks came following a BTC price surge as the crypto asset rose past $17,500 in less than 24 hours. The bullish news led to many contributors in the space sharing their views with the billionaire.

“Let's put it this way… Bitcoin is money, everything else is credit,” said Mati Greenspan.

Meltem Demirors, the chief strategy officer at CoinShares, offered a more in-depth response on how she believed BTC could be effectively used for payments, but added it was “a savings technology at its core.” BlockFi CEO Zac Prince followed with a thread of his own, addressing each of Dalio’s points in turn. He cited institutional investors recently adopting Bitcoin, including Fidelity Digital Assets, Square, Paul Tudor Jones, Bill Miller and Stanley Druckenmiller, to name a few.

Last Thursday, Dalio stated that he believed governments would be likely to ramp up their efforts to restrict cryptocurrencies if they saw material growth. His remarks came when BTC price was roughly $2,000 less than it is today — $15,700 compared with $17,732.

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Original article posted on the CoinTelegraph.com site, by Turner Wright.

Article re-posted on Markethive by Jeffrey Sloe

Citibank Managing Director Sees Bitcoin Price At $318,000 By December 2021

By Brenda Ngari – November 16, 2020

Thomas Fitzpatrick, the managing director at Wall Street giant Citibank has written a detailed report titled “Bitcoin: 21st Century Gold” to the bank’s institutional clients highlighting the similarities between the 1970 gold market and bitcoin.

Citibank MD Analogizes Bitcoin Price Action To The 1970s Gold Market

Fitzpatrick’s report was first publicized by a crypto enthusiast going by the name Alex (@classicmacro) in a tweet on November 14. The report notes that the entire existence of the king of cryptos has been marked by impressive rallies followed by nauseating pullbacks, and this is “exactly the type of pattern that sustains a long-term trend”.

An agreement signed between 44 countries after the Second World War resulted in the United States dollar being pegged to gold, and other national currencies pegged to the dollar. But, in 1971, the Nixon administration broke the relationship between gold and the dollar, ushering in an era of fiscal irresponsibility, inflation, and deficits. With the new policy, the price of gold surged significantly after 50 years of trading in a $20-$35 tight range. 

The Citibank MD further observed that bitcoin’s first bull market from 2010 to 2011 was reminiscent of the gold market back in the 1970s. The report says:

“The Bitcoin move happened in the aftermath of the Great Financial crisis (of 2008) which saw a new change in the monetary regime as we went to ZERO percent interest rates (negative in some countries) and massive QE.”

Fitzpatrick cites the coronavirus crisis and central banks’ willingness to unleash the big bazooka as some of the fundamental catalysts that could likely send bitcoin soaring past its old record. Governments across the globe have maintained that they are willing to keep up with the extensive money printing until the GDP and unemployment rate recovers — and this bodes well for cryptocurrencies like bitcoin.

Fitzpatrick Makes The Case For $318,000 Per BTC By December 2021 

The Citibank executive goes on to draw attention to bitcoin’s weekly chart and the four-year bull and bear cycles starting from 2011. Based on Fitzpatrick’s analysis, bitcoin’s price action has been somewhat symmetrical, creating “a very well defined channel” that predicts an upside move on the same timeframe as the previous bull market (of 2017).

He continued:

“Such an argument would suggest that this move could potentially peak in December 2021, at the high of the channel, suggesting a move as high as $318K.”

While some might say that $318,000 seems unattainable given Fitzpatrick’s poor track record with making predictions, others note that this is another watershed moment for bitcoin. 

Bankers are increasingly becoming bullish on the flagship cryptocurrency. Just last month, JPMorgan analysts published a report indicating that bitcoin’s potential long-term upside is “considerable” as it is now competing with gold as an “alternative” currency. After JPMorgan, Citibank is the latest traditional banking institution to share an optimistic stance toward the dominant cryptocurrency.

Additionally, a major U.S. bank estimating $318K as a target on bitcoin to its institutional clients is insanely bullish.

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DISCLAIMER

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

The original article written by Brenda Ngari and posted on ZyCrypto.com.

Article reposted on Markethive by Jeffrey Sloe

A Bitcoin whale just shorted $100M BTC — Are big holders expecting a larger drop?

A Bitcoin whale placed a $100 million short on Nov. 15 after various on-chain data hints at a whale-induced BTC sell-off throughout the past week.

Image courtesy of CoinTelegraph

            NOV 15, 2020

A Bitcoin (BTC) whale placed a $100 million short on Bybit, according to the pseudonyms trader CL. It comes after various on-chain data points toward a whale-driven sell-off throughout the past week.

Though the momentum of Bitcoin remains strong, there are many reasons that make $16,000 an attractive area for sellers.

There is significant liquidity at $16,000, primarily because it is a heavy resistance level. But the level has seen relatively high buyer demand, stablecoin inflows show. Hence, the battle between buyers and sellers at $16K makes it an area with high liquidity, which is compelling for sellers.

Bitcoin orderbook on futures exchanges. Source: CL, Exocharts (Click image for larger view)

Increasing signs of whales taking profits

A seller aggressively sold Bitcoin on Bybit on Nov. 15. Order flows show that there were sell orders worth around $3.5 million on average consecutively over several hours.

Based on the abrupt large-scale sell order, CL suggested that this may result in two scenarios.

First, the seller could get engulfed and cause a squeeze, which might cause the BTC price to increase. Second, it could continue to apply selling pressure on BTC. The trader wrote:

“Approx 2 hours ago, someone aggressive sold almost ~100M on Bybit, a 3rd of the sells are opens, personally pretty curious to see what happens if this seller/shorter does get engulfed, or if he is let free.”

Meanwhile, other major exchanges have spotted large deposits over the last 24 hours. United States-based cryptocurrency exchange Gemini saw a 9,000 BTC deposit, according to the data from CryptoQuant.

Gemini BTC inflow mean. Source: CryptoQuant (Click image for larger view)

Whales typically utilize exchanges with strict compliance and strong regulatory measures, which include platforms like Coinbase and Gemini.

Considering the large Bitcoin deposit into Gemini, which is worth $143 million, a pseudonymous researcher known as “Blackbeard” said it is time to be cautious.

Just weekend volatility?

As CL noted, Bitcoin’s current market structure is different from the previous cycle. For instance, when BTC was at $16,000 in 2017, the market was extremely overheated with extreme volatility. The trader said:

“Back in 2017, when we pumped from 10k, 15, into 20k, we had OKEx weekly futures trade in 1000$ contangos, now we're here with quarterlies only 100$ above.”

This time around, the rally appears to be more sustainable and gradual. Bitcoin has continued to see a staircase-like rally over the past six months, which has allowed it to evolve into a prolonged uptrend.

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Rather than a sudden spike followed by another steep uptrend, BTC has seen upside followed by consolidation, and so on.

As Cointelegraph reported earlier this month, various data, including Google Trends, show there is still little interest from retail investors unlike in late 2017. On the other hand, there is increasing evidence that Wall Street is starting to take notice.

Hence, there is a strong argument to be made that the ongoing rally is fundamentally different from 2017 despite the current "extreme greed" market sentiment. Notably, the available supply has decreased due to the recent halving, as well as dwindling reserves on exchanges over the past year.

The Bitcoin futures funding rates are also neutral at around 0.01%, which means the market is not as overheated or overcrowded as it was three years ago. This trend could make the downside limited, especially in the medium term.

Original article posted on the CoinTelegraph.com site, by Joseph Young.

Article re-posted on Markethive by Jeffrey Sloe

Twitter’s Jack Dorsey Starkly Disagrees With Ray Dalio About Governments Killing Bitcoin

By Brenda Ngari – November 15, 2020

The better part of this week has been mainly bullish with the price of bitcoin zooming past $16,000. But despite the positive sentiment, billionaire hedge fund manager Ray Dalio doubled down on his skepticism towards the king of cryptos. During a recent interview, Dalio indicated that the coin’s price surging higher would only force governments to “outlaw” it.

Twitter CEO Jack Dorsey has shared his opinion on Dalio’s comments in a November 15 tweet.

Ray Dalio Believes Governments Will Kill Bitcoin When It Sees ‘Material’ Growth

This year has seen hedge fund legends like Paul Tudor Jones and Stan Druckenmiller jumping on the bitcoin bandwagon and endorsing the cryptocurrency as a dependable store of value. Yet, Ray Dalio, the founder of investment firm Bridgewater Associates, maintains his anti-crypto stance.

During the World Economic Forum in Davos, Switzerland earlier this year, the billionaire investing guru claimed “cash is trash” while advising investors to buy gold. His warning? Investors should keep off bitcoin as it is not effective as either a medium of exchange or a store of wealth.

In his latest interview, Dalio sounded the death knell for bitcoin and other cryptocurrencies once again. As ZyCrypto reported, this time he stated that governments are likely to go after bitcoin and other cryptocurrencies should they see “material” growth. “I don’t think digital currencies will succeed in the way people hope they would,” he added.

Is Dalio Right? ‘No’, Twitter’s Jack Dorsey Asserts

As expected, the crypto community came out guns blazing in response to Dalio’s remarks. DeFi developer Julien Bouteloup, for instance, postulated that the Wall Street tycoon was “doing his best to FUD $BTC so he can buy the dip & long Gold.”

The CEO of Twitter, Jack Dorsey has also chimed in with his own opinion. Dorsey responded to an article by leading industry publication CoinDesk that asked whether Dalio was right about authorities killing bitcoin with a resounding “No”. 

Notably, Ray Dalio and Twitter’s Jack Dorsey are on opposite sides of the bitcoin spectrum. Unlike Dalio who uses every chance he gets to bad-mouth the top cryptocurrency, Dorsey is an ardent supporter of bitcoin. The Twitter chief has constantly said that bitcoin is probably the best native currency of the internet. 

Jack Dorsey is also the CEO of fintech giant Square that recently purchased 4,709 bitcoins (worth $50 million at the time) which represented 1% of the firm’s total assets. The announcement on October 8 stated:

“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose.”

Nonetheless, Bitcoin Continues To Shine

Despite the 50% crash that bitcoin saw in March, the cryptocurrency has recovered completely and heavily outperformed other asset classes. Bitcoin has gained over 110% on a year-to-date basis while gold is up only 24%.

More importantly, bitcoin has also outshined Dalio’s Bridgewater fund. Grayscale CEO Barry Silbert pointed out that the YTD returns for Bridgewater Pure Alpha II Fund stand at -18%. Bitcoin recorded a 115% gain over the same timeframe.

BTC is changing hands at $16,067.60 at press time, up 1.38% on the day. 

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DISCLAIMER

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

The original article written by Brenda Ngari and posted on ZyCrypto.com.

Article reposted on Markethive by Jeffrey Sloe