U.S. Congress Struck a Positive Tone on Cryptocurrency in Latest Hearing A congressional hearing before the U.S. House Committee on Agriculture today struck a positive tone towards the impact that cryptocurrency and digital assets can have for
A congressional hearing before the U.S. House Committee on Agriculture today struck a positive tone towards the impact that cryptocurrency and digital assets can have for the economy and processes.
The hearing included academics, engineers, and entrepreneurs in the cryptocurrency industry. They included:
The recent indictments of 12 Russia-linked hackers related to their alleged involvement in the 2016 U.S. elections was brought up. Bitcoin was mentioned as the means the hackers used to fund their activities and whether this helped hide their indentities.
However, committee members were informed that bitcoin’s public ledger allowed investigators to pinpoint the movement of funds much more easily than cash. The committee chairman, Michael Conaway, said, “As long as stupid criminals keep using bitcoin, that’d be great.”
With the numerous subject matter experts on the panel, the discussion went into much more detail than others, like the ones at the SEC.
Amber Baldet made a good case for current blockchain technology as an early open framework built on open-source technology, much like the infrastructure of the Internet. In its early state currently, blockchain technology has the potential to grow into new, foundational technologies like the SMTP email protocol. Baldet thus recommended a sensible and moderate regulation.
Baldet said, “the committee can take a more proactive approach to regulation” as a means to support a blockchain becoming a global infrastructure, as the United States did with the internet. This is in contrast to “reactionary” regulations.
The questions from some committee members did keep the common concerns over bitcoin’s price volatility and ICO scams. Gorfine, of the CFTC, conceded that there were a large amount of bad actors in the space and that upwards of 80% of the ICOs have gone bankrupt.
However, Daniel Gorfine stated that his work is focused very much on a “fintech primer”, which ultimately helps educate investors and regulators understand the technology and avoid scams. The lack of education is a large source of fraud in the industry for market participants, in addition to still-murky regulations.
Gary Gensler, Senior Lecturer at the MIT Sloan School of Management, encouraged speeding up decisions about sensible regulations in order to keep innovators in the United States.
Gensler believes that strict or unclear regulations could move innovation and economic benefits offshore. If other countries get ahead of the United States in the industry, this could be a concern. History from other sectors has shown that once innovators leave the country, it’s more difficult to bring them back once the regulatory decisions are made.
Chairman Conaway concluded that “the hearing was very elucidating for them on different issues.”
However, a recurring concern throughout the hearing is the centralization of capital and mining in bitcoin. One problem is that only a few wallets contain over 90% of all circulating bitcoin. Another point is that the largest miners of bitcoin are in China and Russia, both of which make up about 50% of mining power. Bitmain is rapidly expanding its business globally.
Overall, it is encouraging to see that the committee brought experts in private industry and academics to inform regulators on the complexities of blockchain technologies. The group appeared to synergize their specialties in the industry. The committee members could do well to bring more experts on board in the future, since many still appear to be learning about the technologies.
The newly published application details a system in which any type of data element — whether a document, graphic, or database value — could be located, accessed, and protected by means of tokenization.
Tokenization, as the patent filing outlines, uses encryption methods to process an originally unrestricted data element into a corresponding restricted token that can subsequently only be retrieved — or ‘detokenized’ — by a specified user. The system harnesses cryptography to bind specific values to data under an authenticated digital signature.
The tokenized system can thus be used to both control access and confidentiality, authenticate data origins, and maintain data integrity by detecting any undue modifications to an element.
Wells Fargo explains that tokenization can be used to protect data “even when it is stored in a publically accessible environment, such as the cloud, within a blockchain…in a flexible way that is file and data element neutral”:
|“Unlike the limited, anonymous signatures supported by existing systems, this tokenization manifest supports single signers, multiple signers, or co-signers to store information publicly without loss of confidentiality of any sensitive content.”|
The proposed system would furthermore flexibly allow content owners or managers to select a desired output for tokenization — which can be used for any file in part or in its entirety — and select how it will be manifest for restricted users, e.g. through blurring, randomized text, or blacking out.
Just last month, Jeremy Allaire, Co-Founder & CEO of payments company Circle spoke at MoneyConf Dublin of an unprecedented “crypto-revolution,” suggesting that global society is “at the beginning of a tokenization of everything” that will extend to “every form of value storage and public record.”
While evidently embracing the technology that underlies cryptocurrencies for its own purposes, Wells Fargo has recently moved to prohibit its customers from purchasing crypto using credit cards issued by the bank due to perceived investment risks.
The bank was nonetheless an early pioneer of the first-of-its-kind international freight shipment to China back in 2016, in what was the world’s first reported interbank trade using a blockchain system.
In related news, Bank of America also filed for a patent today regarding the use of blockchain for data validation.
Bank of America (BoA) has filed a patent for a blockchain-based system allowing the external validation of data, according to a United States Patent and Trademark Office (USPTO) patent filing released July 17.
BoA’s patent filing proposes using blockchain for tracking resource information and confirming resource transfers, noting that
|“A need currently exists for providing a more accurate indication of a user’s financial standing by allowing external validation of data in a process data network.”|
The patent describes how the system would record information on the blockchain based on “aggregated information associated with past transfer of resources executed by an entity,” and would update the information on the blockchain with each new transaction activity.
In April, the USPTO had published another patent from BoA for a blockchain-based storage system. According to Fortune, BoA currently has 45 live patents related to blockchain pending, with the bank’s CTO noting that the amassing of patents allows the bank to be “prepared.”
At the same time, the BoA has become infamous for its distaste for cryptocurrency, in May calling Bitcoin (BTC) “troubling” while upholding a previous decision to ban its customers from purchasing crypto using credit cards.
Despite its apparent foresight in the blockchain sphere, BoA is not without its competitors, Mastercard this week unveiling a patent of its own allowing transactions of what it calls “blockchain currencies.”
Blockchain and investment company Decentralised Capital has announced the launch of Australia’s first ever cold storage vault for digital assets. The vault was created in partnership with Custodian Vaults, a subsidiary of precious metals firm Pallion Group.
According to Stephen Moss, founder and director of Decentralised Capital, the new crypto vault is expected to take advantage of Australia‘s growing market for digital currency storage solutions, and it is a sign that bitcoin is a bona fide long term asset.
Following a spate of high profile hacks at major exchanges, resulting in losses worth hundreds of millions of dollars, industry players have developed a heightened interest in cold storage, which ensures that private keys are stored offline and away from internet thieves. The new crypto vault by Decentralised aims to take advantage of this interest, marketing itself as Australasia’s first insured cryptocurrency vault.
Speaking in a recent interview with the Australian Financial Review, Moss alluded to the industry’s need for secure and reliable crypto custody services. Giving his thoughts on the crypto industry and explaining the problem his firm is solving, he said:
“This is a solution for the next phase of the industry and it gives real security…You can’t hack your way into the safe…In my opinion bitcoin will not be remembered as the bubble, but the pin. While the short-term future of bitcoin may be debatable, the blockchain and its benefits are not.”
Cold storage is not a new concept, as it is employed by a large number of crypto holders using computer peripheral storage devices such as USB drives to store crypto wallets. Such devices, however, may remain susceptible to hackers once they are connected to the internet, and even when offline, there is a physical theft risk.
According to Moss, the new Decentralised custody service gives its users direct access to their crypto funds using a combination of security measures including CCTV monitoring, physical surveillance, biometric identification, PIN codes, alarm systems and fire control systems.
The service targets high net worth individuals, institutional investors, crypto exchanges, and ICO issuers, offering them all the advantages of cutting edge cold storage along with an in-house private WiFi room to permit safe inward and outward cryptocurrency transfers. In the event of a catastrophic failure of all defenses, all digital asset holdings are also insured.
Bitcoin company Xapo uses a range of formidable cold storage security solutions including satellites, “deep” cold storage, and military grade bunkers spread out across five continents.
Having seen the growth statistics, Custodian’s parent company, Pallion, is now seeking to get in on the growing crypto custody market.
“While traditionally we have offered secure vault services for clients storing precious metals and other assets, we are increasingly receiving interest from clients searching for solutions to store cryptocurrency,” said Director Janie Simpson said.
The cryptocurrency industries largest crypto mining company, Bitmain, just opened their new office in Silicon Valley ahead of its planned Initial Public Offering (IPO) later in the year.
According to the Silicon Valley Business Journal, the China based cryptocurrency mining hardware manufacturer moved into a 20,000 square foot office space in downtown San Jose California. The company filled the last vacancy of the city’s Riverpark Towers office building, which is known to be the hub of tech startups like Cohesity, Okta, and WeWork.
The expansion of Bitmain’s company is not surprising after the firm was recently valued at over $12 billion following the end of last month’s $400 million funding round. This makes it the most valuable cryptocurrency company in the world as well as the most valuable privately held tech startup.
Cryptocurrency companies have centered themselves around the same geographic locations as other tech industries. This recent move will better position Bitmain to expand and manage its digital empire. The company has been targeting expansion into the United States and Canada due to the industry’s uncertain future in China. The company has currently opened mining centers in both Washington state and Québec , Canada.
Bitmain has started investing in other tech startups, so it’s moved to Silicon Valley would naturally benefit its investment capital arm of the company.
The crypto mining company recently led a $110 million funding round for well renowned cryptocurrency trading desk, exchange, and investing app Circle. Bitmain has also announced that they plan on creating a USD pegged stablecoin in the near future.
Recently, Bitmain invested $50 million in the Opera web browser, which allowed it a controlling stake in the company. Shortly after the investment, the company announced that it would integrate an Ethereum wallet into their web browser.
Just this week, Bitmain also funded a round for the launch startup Block.one (creator of EOS cryptocurrency), alongside PayPal cofounder Peter Theil. The investment capital size was not announced publicly.
Boeing, the the world’s biggest aviation company, recently announced their intention to tap into blockchain technology by utilizing it for their future unmanned airplanes used for the transport of cargo as well as future commercial air travel.
Boeing is partnering with SparkCognition, who develops artificial intelligence and is capable of developing a decentralized platform able to track unmanned airplanes in flight and allocate traffic and routes to ensure secure transportation. This announced on Tuesday, July 17.
This partnership will make use of blockchain technology in order to monitor Boeing’s next-generation airplanes which will deploy within numerous commercial applications and include remote package delivery as well as commercial air travel. They also intend to use blockchain for their future services similar to that of the uberAIR, which is in the early stages of planning.
In preparation for the future, Boeing and their new subsidiary, SparkCognition, plan to focus on advancing aeronautic flight and next-generation travel.
For example, Boeing NeXt is including the company’s first hypersonic passenger flights concept alongside its electrical vehicle takeoff and landing vehicles for on-demand cargo transport in future urban air travel.
SparkCognition founder, Amir Husain, recently stated “the urban aerial mobility opportunity will lead to the creation of the largest market in our lifetime, estimated by some analysts at over $3 trillion”.
BitPay, the cryptocurrency payment processor, has become the 8th firm to receive a BitLicense from the New York Department of financial services (NYDFS), which is the most restrictive state-level framework for the United States cryptocurrency industry.
The cryptocurrency payment processor is the first company of its kind to receive a BitLicense. Coinbase also received their license back in 2017, however their core business model does not revolve around payment processing, but more so around cryptocurrency trading.
NYDFS announced Monday, July 16, that it approved BitPay’s application after a comprehensive review of the company’s anti-money laundering, anti-fraud, consumer protection, and cyber security policies.
Maria T. Vullo, the superintendent of NYDFS stated, “we’ll continue to the support a competitive and vibrant virtual currency market which both connects and empowers New York within a global marketplace while still maintaining a strong, statewide regulatory oversight.”
As of today, BitPay will be able to process cryptocurrency payments for New York residents and merchants. The license authorizes the company to issue cryptocurrency debit cards within the state. Currently, the company supports Bitcoin and Bitcoin Cash.
Although BitPay is the 8th firm to receive a BitLicense since it has been established in 2015, half of those applications have been issued in the past 3 months. This suggests that the agency is quickly becoming more comfortable with the maturing industry.
The CEO of Blackrock, Larry Fink, previously described Bitcoin, prior to last year’s all-time high, as an “instrument people use for money laundering”. This is a complete 180 from BlackRock’s more previous critical stance towards the cryptocurrency.
The decision seems to follow in the footsteps of the financial giant Goldman Sachs, who will among other things, focus on whether the company should invest in Bitcoin futures.
A spokesperson from BlackRock stated that the company has been “looking at blockchain for several years now” however it did not mention anything about cryptocurrency.
The CEO of Goldman Sachs, Lloyd Blackfein, had previously told the media that Bitcoin “is not for him”, before another announcement was made that there would be a dedicated research team looking to how Goldman Sachs could provide a range of financially based cryptocurrency products upon the massive customer demand.
BlackRock has just under $6.3 trillion in assets under management as a 2017. Institutional money seems to be waiting for its ideal entry point while the discussion continues to circulate among financial commentators.
Switzerland’s principal stock exchange, SIX Group, announced that they’re open to the possibility of trading cryptocurrency on their digital trading platform. Although the platform is still in development, they expect to launch by mid 2019. This stated in an interview with the Swiss info news outlet on July 15.
SIX Group (Swiss Infrastructure And Exchange), is the country’s largest stock market and plans to launch a fully regulated platform for cryptocurrency. The service intends to offer a wide range of services including Initial Coin Offerings (ICO) consultation from those companies that are not classified as securities.
A spokesperson of SIX Group, Stephan Meier, stated that there is a real need for transparency and accountability within the crypto sphere. According to him, this would benefit both investors and businesses in the industry as well as the participants of institutional markets.
“Traditional service providers and investors are interested in our upcoming service for offering digital currency and want to take advantage of these opportunities for raising capital and trading in digital assets.”
Meier didn’t disclose what specific cryptocurrency would be offered to listings on their upcoming platform. He claimed that the company would technically be able to add various cryptocurrency to the platform and that each digital asset would undergo a “due diligence” process before being added. However, he still noted that the question of whether cryptocurrency will be added still an open discussion.
Meier claims that SIX Group is looking to build a bridge between traditional finance services and digital communities. He emphasized that the company would be working in close proximity with regulation authorities in order to find out what areas need to be adjusted for additional legal framework.
Switzerland was reported earlier in the week to be the second most favorable country for ICO’s in terms of funds raised which was only outperformed by the United States
On the most fundamental level, traders use visualization as a crucial element to technical analysis. Patterns showcase the unique ability of our brains to locate patterns and build models by comparing price charts to separate historical price movements.
These price formations tend to correspond to similar historical price movements, due to the fact that crowds tend to react to similar situations in similar ways.
View a chart as a “log” of crowd behavior, in order to better understand why price history can help us gauge the current state of the market. Price history not only allows us to spot the current mood of participants, but most importantly, the balance between buyers and sellers.
On the other hand, your mind can play tricks on you as well. Traders tend to see patterns that aren’t necessarily there and confirm these subconsciously. Psychologists call this “confirmation bias”. It is the most notorious enemy of traders and investors alike.
While visualization is an important and necessary tool for traders, especially experienced ones, never treat a chart or pattern as the end-all be-all. They aren’t magical tools, however in experienced hands, they can boost your returns and help you find great trading opportunities, while protecting your investment.
Support and resistance levels can be seen as the most basic (sometimes most reliable) chart patterns. As a general rule, simplicity is extremely helpful when formulating your trading strategy. Over complicating your charts with a plethora of charting tools and indicators will only lead to confusion. You can certainly find some confirmation on complicated charts; however it typically won’t give you any more direction than simple ones.
The patterns we’ll discuss below aren’t necessarily the Holy Grail of chart patterns. They are simply the best tools we can use to trade the cryptocurrency markets with at a surprising degree of accuracy.
For example, many traders like the head and shoulders pattern as it has an accuracy of over 80% when it’s fully complete. Not too many other patterns can match that.
Within this guide, I’ll go over 4 of the best and most widely used chart patterns in cryptocurrency trading. Follow the instructions and practice on a live chart. Teach yourself how to spot these patterns and trade them appropriately.
Let’s start off with the classic head and shoulders chart pattern which most people have heard of and know what it resembles.
This pattern generally signals a reversal in the market and means that there is a failed attempt of the trend to move any higher. An uptrend can be easily defined as a series of higher highs and higher lows. In the case of the head and shoulders pattern, the last trend (right shoulder) fails to make a higher high and higher low. Soon thereafter, a new downtrend is initiated.
Turn the pattern upside down, and we have an inverse head and shoulders pattern. This signals a shift from a downtrend to an uptrend.
The head and shoulders pattern is considered to be the most reliable patterning trade. It can often be easier to spot on a chart and can help you filter through all the clutter.
This is what is known as a continuation pattern. It’s considered one of the most reliable bullish patterns in trading. Also referred to as a pennant or wedge, the bull flag is often formed when the price enters a consolidation phase following a strong uptrend.
The consolidation phase shows that the market is gathering momentum for the next rally up. It’s a very natural part of a trend where those who were at the beginning of the trend are starting to take some of their profits. On the other hand, new traders are entering the market and taking positions for the next run-up in price.
This pattern is a bullish one that’s very well known in the stock market and also appears in in the crypto market just as often.
As you can see from the image below, the pattern forms a cup like shape before a dip on the right corner of the cup, leading to another significant rise in price. In order to confirm the pattern, you would want to look out for a significant increase in trading volume near the end of the handle. A buy order should be entered when the price breaks above the right corner of the cup.
The logic behind this trading pattern is that the cup represents the bottom of the market and the handle creates a higher low which by definition means that an uptrend will begin.
This pattern is very similar to the bull flag, where price appears to be stuck between a support and resistance. The more touches there are between the support and resistance the more reliable the pattern is considered to be.
The rectangle pattern is a trend continuation pattern and is often a waiting game for traders as it’s difficult to tell exactly when the price is going to break out. Depending on the direction of the preceding trend, the rectangle can be either bullish or bearish.
This pattern can be traded into ways. One method would be by placing an order at the lower end of the rectangle and placing a stop loss right under. The second method would be placing a buy order just above the upper end of the rectangle in hopes of catching the breakout.
The problem with this last option is that a price spike can happen quickly and then subsequently dip back down through the rectangle pattern. This is called a “fake out” and occurs quite frequently. As with anything you do in trading, taking the slightly more conservative approach should serve you better in the long run.
Now head on over to TradingView, and practice spotting all four of these popular trading patterns. Once you think you’ve got a handle on things, open a demo account or paper trade (fake money) on TradingView.
The last step will be to start trading with a very small amount of cryptocurrency within an exchange. See how well you can stick to these charting patterns, with money on the line. That’s a whole lesson in itself, that no trading guide will ever be able to teach you.
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