EXCLUSIVE: Verge Hacks Causing MindGeek/Pornhub ‘Uncomfortable Conversations’

The Verge hacks over the past 45 days have been covered extensively. So much so that it has caused MindGeek to question its long term commitment to the cryptocurrency.

A source at MindGeek spoke with us this morning and described several ‘uncomfortable conversations’ between Verge leadership and MindGeek management.

The first hack was a concern and a surprise to us. Verge positioned themselves as a privacy token and that is largely what made them attractive. The hack called that into question, but our concerns were set aside after a couple of conversations with Justin and the Verge team.”

”The second hack was a disaster. All sorts of promises were made that this was a ‘one-time phenomenon’ and that it wouldn’t happen again. And then it did. You can imagine the possible brand damage that could cause us serious pain should hackers find their way into our user database via a back foot like Verge.”

”If I could describe where we are at with the partnership right now it would be this: cautious. Very, very cautious. Another hack and we’d be out. Pure and simple.”

This sort of fallout was inevitable once a ‘51%’ attack was levied on $XVG. Any partner would be justifiably concerned and give rise to more questions than we can probably get our heads around.

Verge simply can’t afford to get ‘stopped out’ on this trade. Whether you philosophically agree with the partnership or not, it is worth, potentially, millions upon millions of dollars. So saving the relationship is imperative for Verge’s long term use case and legitimacy.

While the firm is surely working on more partnerships at the moment, they need to dedicate their full resources to mending this relationship. It acts as a gatekeeper to more deals if they can execute as promised.

But if another hack occurs it sounds to us like MindGeek will bail and $XVG could really, really struggle to regain any sort of price momentum.

Based on our MindGeek contact it sounds awfully clear that Verge is on notice and better be working tirelessly to prevent another attack.

Should they fail to prevent another hack it could get really, really ugly for $XVG bag holders.

Tim Draper Takes To The Stage And Breaks Down A Salty Beat For Bitcoin

Tim Draper addressed the crowd at a technology conference in Amsterdam on Friday. He intoned few words about Bitcoin [BTC] in his speech and got the crowd’s attention through his ‘rhythm’. It was a side of Draper that we hadn’t seen before, but he seems to be feeling pretty good about his Bitcoin evangelism at the moment.

The Bitcoin [BTC] enthusiast and entrepreneur, earlier predicted that Bitcoin will reach a value of $250,000 in 2022. He mentioned this prediction in his book and stands by it.

Earlier, on 23rd May, he presented his vision for digital governments based on blockchain technology in an opening keynote speech at the GovTech Pioneers Conference.

He stuck to his prediction that Bitcoin will soar to $250,000 by 2022. In the Next Web conference, he spoke about the potential in technology regarding the banks and venture capital. He spoke about his hopes about cryptocurrency, the new world order, and his bullish beliefs about the token, Bitcoin [BTC].

He also believes that fiat currency will lose its value, he said:

“So, you’ll go in and try to buy coffee with fiat and the barista will laugh at you.. Because there is so much more friction with fiat currency than there is with cryptocurrency. And I think you’ll be able to buy it with Bitcoin, Ether, or Bitcoin Cash.”

In 2014, he made a purchase of 30,000 BTC when it was trading at $650 at a public auction. However, it was seized by the US authorities from Silk Road.

He ended his on-stage interview by a rap on cryptocurrency:

“Wherever you are,
Thank you for Bitcoin, the blockchain and more
You started this snowball from the top of the hill
And now it’s pervasive
It’s the people’s will
It’s the people’s will
We want a new world order
We want to play across the border
Just wanna be a Hodler
on my Bitcoin hustle
on my Bitcoin hustle
on my Bitcoin hustle
Yeah!
Get your hustle going
Flex that crypto muscle
Yeah!”

LOL! Tim is going to Tim. The enthusiasm can be contagious and he seems to be the worlds foremost ‘Crypto Evangelist’ at the moment – displacing other high profile personalities. Of course, a middle-aged white guy constructing a poorly executed rap about a significantly white/male phenomenon seems a bit much.

Still, wherever he goes, whatever he says the crypto world is listening. And holding on to his 225K bitcoin prediction for dear life.

Trading Crypto: **Saturday Morning: BTC Price Action Consolidates, Settles In 7k Range

Bitcoin has managed to stay in consolidation mode for the past twenty-four hours and continues to do so. Staying between 7200 support and 7600 resistance, BTC has managed to keep the losses at a minimum for the last 12 hours by trending higher on the minor scale(15 minutes or less) and has attempted to keep steady with the moving average line. Now, a new opportunity for upside is present.

BTC has formed a flag which would generally be considered bearish but is teetering with upside breakout and therefore may bring some bullish momentum to the table, at least shorter-term. This can also be seen with declining leg lengths on the hourly scale that drove the price into this consolidation. Now nearing a breakout point, the two options on the table are clear-cut:
-A break to the upside which will break the 7600 resistance barrier as price meets the MA line hourly. This will be followed up with a support test of 7600 as well.
-A downside break at 7350. This will seek out support at 7200 and continue the downtrend in full swing. Statistically far less likely with the current bullish momentum shorter-term.
This may also be upheld by the fact that the daily chart seeks some sort of upside movement with overselling occurring now for the last several days with no giveback.
The tech specs also indicate a couple of noteworthy items.
Stochastic readings seek out overbought levels once again across the board.
Daily stochastic has been oversold for quite some time and looks for some sort of upside momentum with a possible cross to the upside nearing.
MACD now positive hourly, with the 4-hour scale cross signal bullish, however, there has been no breakout occurring since this cross.
BTC is currently a Watch. Upside play with high risk can be planned above resistance in conjunction with downside protection right below to cut losses due to uncertainty.
Trend change has not been confirmed – high and higher low needed

Ethereum Dumps More Than 25% This Week – Is It Poised For A Snap Back?

ETH has been in a major downtrend over the past few days plummeting by 25% in 4 days.

There were obvious reasons to short from that point 4 days ago as we broke under a major uptrend line and were rejected by a major downtrend line from March at the same time.

Target would have either been the next uptrend line or a 1:1 ratio of the previous downward wave. Ethereum gave us yet another short set up as we broke under and was rejected by the trend line.

Ethereum has given us no reason to go long as we still cannot get over the red downtrend line.

 

 

So with that, if you have not already entered a short position or a long position from the 1:1 ext there is no reason to enter any trade. What we will look for instead is ETH to break out of this downtrend and over the horizontal green support in order to go long, or for a risky long you could enter on the first retest of broken trendline(red).
If you have entered a short as I have (my targets are in red circles) use a trailing stop and move as we go. If and when we break out my long targets are in green circles.

CHARLIE SHREM: “Why are you buying cryptocurrencies…”

When you buy a cryptocurrency, what are you actually buying?

Some coins we want to use as a convenience like a pure currency. Others give us access to a platform or app. Generally speaking, we are buying cryptocurrencies most often as investments, with the hope that they will appreciate in value. These function like a currency, but if you’re buying them on an exchange, it feels more like you’re buying a stock. Depending on what coin we’re talking about, it may behave in a lot of different ways.

Personally, I fell in love with Bitcoin because I see it as an independent movement that’s not controlled by any one party being on the path to full censorship resistance. I see a need for a financial system that’s controlled only by the market itself. This is why I hold Bitcoin long term, along with other privacy related coins.

Some cryptos can act as a security and pay you a profit of some kind. For example, TenX (PAY) gives its owners a share of transaction fees. Others grant voting rights for something such as Decred (DCR). Still, others can facilitate or pay down a debt transaction (SALT) or even grant an ownership stake in something.

And much like a stock split, ownership of one asset can result in ownership of another, essentially for free. We have seen too many BTC forks this past year, but savvy users received coins like Bitcoin Cash (BCH) and Bitcoin Gold (BTG) just for owning BTC and knowing what wallets or exchanges to use that yielded those coins from the forked blockchain. Still, other blockchains grant coins from spin-off projects such as NXT (XEM, ARDR, IGNIS).

At the same time, we often refer to BTC (or even other coins) as a ‘store of value.’ That is a term usually reserved for gold, other precious metals, or real estate.

So, when we look at the overall scheme of asset classes — traditionally stocks, bonds, currencies, real estate, precious metals, collectibles etc., where exactly do cryptos fit? Are these things currencies, stocks, debt instruments, stores of value, or what?

The solution is to designate it as a new asset class altogether. Instead of expecting crypto assets to behave like a currency or regulate them like a security, let’s just acknowledge that they fall under a new and different asset class that has a new set of behaviors and requirements.

In a report called “Bitcoin: Ringing the Bell for a New Asset Class,” Chris Burniske (ARK Invest) and Adam White (Coinbase) argue exactly that.

The basis of their paper is a 1997 paper by Robert Greer called “What is an Asset Class, Anyway?” where Greer defines asset classes in the broadest terms. Greer lays out three superclasses of assets, which include capital assets, consumable/transformable assets, and store of value assets.

Burniske and White recognize a problem with Greer’s superclasses because the lines between these classes can be a bit fuzzy. And even Greer acknowledges this, specifically referring to gold as belonging to both consumable/transformable assets and store of value assets.

This is important because the problem for us is that cryptos completely obliterate the lines between these superclasses.

In fact, a coin can be in any of those three classes, depending on which coin we’re talking about.

Burniske and White lay out their case specifically using Bitcoin “as the first of its kind in a new asset class — cryptocurrency.” Burniske and White go on to evaluate Bitcoin using these four broad categories:

  • stability
  • Politico-Economic Features
  • Correlation of Returns: Price Independence
  • Risk-Reward Profile

They look at use cases, governance, volatility, trading volume and liquidity, the ratio of people who actually use the currency to investors, absolute returns, and other factors. They specifically make a comparison to gold, as an example of an asset in an established class.

It gets really interesting when they investigate Bitcoin’s Price Independence. They clearly show that Bitcoin has an almost neutral correlation with any other class. That means that the price of Bitcoin doesn’t move up or down along with any other broad class of investments. It’s price independent.

What they determine then is that the profile for Bitcoin, when viewed as a class, is sufficiently different from the other classes to be considered its own category. They even suggest that some of the traditional arguments against Bitcoin, such as it not being backed by any physical asset or governmental assurance, don’t really have as much merit as might be believed. They argue that a purely digital asset shouldn’t be a surprise in an increasingly digital world.

In fact, many of those traditional assets are becoming increasingly digital themselves. Most of our cash is actually digital nowadays, and stocks and bonds are transacted and owned in purely digital terms. When was the last time you actually held a physical stock certificate? That cryptos are purely digital is a fundamental feature of their value rather than merely a tangential fact of a transaction.

That cryptos are arguably backed by computing power or electricity is also possibly a fundamental feature of the asset class. It’s less tangible perhaps than a physical asset or government decree, but just may be a new paradigm for an increasingly intangible world. With smart contracts and increasing blockchain interoperability, cryptos can interact in ways that other asset classes simply can’t. These are features that make cryptos distinctly different as an asset class.

Burniske and White also suggest that there is a problem of nomenclature and recommend a new naming convention. We most often use the term cryptocurrency which tends to lead people to lump cryptos with currencies. But they offer others like “crypto token, blockchain asset, or digital asset.” At Crypt.IQ we use many terms interchangeably, but generally agree that crypto assets are a more formal name that fits the class in general, rather than cryptocurrency.

As you formulate your investment strategy, keep in mind this new paradigm — crypto assets are a new asset class. They should hold a place in your overall portfolio according to your investment needs and risk profile. Weight your portfolio as needed, keeping a balance between cryptos, stocks, real estate, cash etc. As an investor in this new asset class, you are a pioneer helping to redefine 20th-century norms and reshape them into a 21st-century investment paradigm.

This article was originally written and published here: Charlie Shrem Medium

If you’d like to hear more from Charlie hit the link: Crypto IQ

Trading Crypto: **Friday Morning: Bitcoin Struggles To Hold 7,600; Downtrend Technicals Remain Dominant

Bitcoin has struggled to maintain the 7600 level and continues to do so. At the moment, support lies at 7200, the overnight (US CST) trading session allowed the 7300 region to be hit. However, this is NOT true support. BTC continues to hold this level by showing candle closes above. The hourly, 4-hour chart and daily are all attempting bullish movement on a small scale, and therefore 7600 resistance should be tested over the course of the next several hours. However, the official trend is still down, and mid-term looks to be sideways.

BTC is a confirmed short with lower highs and sustained lower lows. It is considered a higher low (as of this writing) and may see, at the least, some upside movement on the short term. This is also seen by looking at the trend leg lengths that are declining. These are displayed as the hard white lines. Declining leg lengths give the indication of momentum slowing down, and in conjunction with a higher low, upside play is at hand. Risk Level for this type of play is Medium.
In order to capture gains throughout the day with BTC on the brink of breaking lower or potentially giving a pivot, it is advisable in my opinion to look at the alt-coin market to play short burst gains from BTC. Additionally, there is no trend change confirmation yet, and therefore a mid-term or long-term buy is not qualified and comes with extremely high risk.
Be the Smart Money
BTC is currently a No Play; Medium-Risk Short-Term play at hand by playing alt-coins.
Futures Traders – trade the trend. With a higher low currently, the trend is changed from down to neutral. No Play; capital conservation. Look for a break below previous low to continue shorts or trend change.

LAWYER UP: Kraken Hires Former Federal Prosecutor To Handle Probe

Kraken didn’t take kindly to the sweeping exchange probe that was announced and ongoing by the federal government earlier this year. In fact, their CEO, Jesse Powell, was offended and vocal about the nature of the probe from its outset:

“Kraken is always willing to work with regulators and law enforcement,” chief executive Jesse Powell said in a blog post responding to the AG’s inquiry. “Whether you think you have us by the balls or not, approaching us with some basic respect and having a conversation is always going to make the interaction smoother and help you get what you want faster than storming in with your “or else” list of demands.”

As their response has evolved Kraken has moved to hire a superstar lawyer to deal with the widening probe. The San Francisco-based firm has hired Mary Beth Buchanan, a former federal prosecutor appointed by President George W. Bush, as its general counsel.

Business Insider described her this way:

“Buchanan, who is joining Kraken from law firm Bryan Cave, is known for being the youngest person appointed to the position of US Attorney for the Western District of Pennsylvania. She was also the first woman. At Bryan Cave, Buchanan was a partner covering white collar and securities-related cases. Buchanan is also featured in the Netflix four-part series “Evil Genius: The True Story of America’s Most Diabolical Bank Heist,” which explores a bank robbery case for which she served as prosecutor. Buchanan will be based in New York, according to a person familiar with the hire.”

The move is a strong one and looks to insolate Kraken even further as they harden their stance on the probe. As a reminder Kraken actually refused to voluntarily participate in the probe and thought it better to ‘fight then flight’.

Internally we applaud this move by Kraken. Just because the Feds come knocking doesn’t mean you immediately open up the kimono and spill your guts. Just take a look at the track fiat banks took during the financial crisis, spending billions on lawyers on an annual basis that eventually extracted fines rather than more serious criminal actions.

If you have been watching closely crypto firms have been hiring top legal talent over the course of the first half of 2018:

Bitfinex hired Peter Warrack, a former anti-money laundering executive, as chief compliance officer. He joined from the Bank of Montreal.

Blockchain, a crypto-wallet firm, hired Marco Santori who left Cooley LLP to become the chief legal officer of that firm.

So the crypto community isn’t going to just bend over and say “thank you, sir, may I have another”. They are perfectly within their rights to defend themselves vigorously and not be made out to be rogue actors in a developing industry. Lawyer up and let the legal eagles sort it out.

Bitcoin Continues Bear Market Slide; Flirting With Another Leg Down

Bitcoin has broken all bounds and continues downward with the break of 8k support, and now 7600 support. So far, there has been almost no giveback, with the hourly scale struggling to even break upward against the MA(moving average) line. As candle close* is important here, clearly BTC has struggled to maintain 7600 as support as well, which currently acts as resistance instead. The next level down for support is 7200, which was briefly tested with a wick but not closed upon quite yet. Support and Resistance Levels continue to stand at 8k/7600/7200/6800.

Looking at the Rogue* Wave system, this leg down has now matched the previous trend leg down. As far as retracement points go, look for 7680/8k to be tested if BTC can manage the retrace over the next several hours.
The tech specs show exactly this.
Stochastic reading on the 4-hour scale is oversold (<20) and seek to exit, meaning there should be an attempt to retrace. Hourly has stayed in this lower region, a sign of volatility to come, and daily continues down, however looking to pivot.
MACD readings are negative across the board, with only hourly currently looking to cross to the upside with very low momentum. Watch this.
BTC is currently a No Play. Support needed:::
Futures Traders – trade the trend. The current short-term trend(futures only) is sideways as consolidation continues – No Trade.

BLOOMBERG: Justice Department Opens Bitcoin Market Manipulation Probe

Bloomberg is reporting that a criminal probe has been commissioned into price manipulations of both Bitcoin and Ether – and possibly other cryptocurrencies of distinction.

“The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter.”

‘Critics’ is an interesting concept here. If you’ve spent more than five minutes in crypto you know that market manipulation goes on in alt-coins constantly. Not even the founders of those coins are immune from specific allegations of ‘pump and dump’ language and actions. So the only surprise here is this – Bitcoin is probably the coin least susceptible to significant market manipulation.

“The investigation is focused on illegal practices that can influence prices — such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said.”

Spoofing is an age-old move that has existed in fiat markets since they came into existence. The term is now being used in reference to cryptos as if to scare off newcomers to the space. Lame.

“The illicit tactics that the Justice Department is looking into include spoofing and wash trading — forms of cheating that regulators have spent years trying to root out of futures and equities markets, the people said. In spoofing, a trader submits a spate of orders and then cancels them once prices move in a desired direction. Wash trades involve a cheater trading with herself to give a false impression of market demand that lures other to dive in too. Coins prosecutors are examining include Bitcoin and Ether, the people said.”

As we see it, this probe would be significantly more interesting if it included coins like $EOS or $DOGE or $GVT or $XVG. But they aren’t mentioned. The two largest crypto brands are being attacked and that makes the Justice Department announcement come off as half-cocked and completely unaware of the actual movements in the crypto markets.

Ultimately who knows where it goes, but unless it finds its way to the alt-coin world they aren’t going to find anything even remotely interesting or prosecution worthy.

Fundstrat Partner Thomas Lee Sticks To His Bitcoin Bull Prediction; “Typical crypto volatility…”

Fundstrat’s Thomas Lee is sticking to his guns on his Bitcoin 25k prediction. Despite the sustained bear market over the past 5 months to start 2018, the notorious Bitcoin bull hasn’t been swayed in any material way.

After Bitcoin crashed yesterday to below $8000, the outcome looked bleak for BTC HODL’ers. It is currently trading at around $7500, undoing the profits it made this year for a new low in 2018. Lee believes that the drop is due to “typical crypto volatility”, identifying three factors that will make his prediction come true.

While he did say that the charts are “pretty scary for folks”, he mentioned that the “notion of blockchain as a way to solve trust in the digital world has gained a lot of traction”.

The first of Tom Lee’s three factors is the cost of producing Bitcoin. He believes that it is trading at cost, with the cost of making Bitcoin being around $8000, unlike gold, which is being traded at double its extraction cost.

Lee also mentioned that he would keep an eye on institutional investors, believing that they would be one of the big catalysts in the crypto space.

He said:

“I think institutional investors have gained a lot of interest, and they haven’t really come into crypto yet because there is still some regulatory uncertainty, but that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies.”

Cryptocurrencies are still waiting on regulators to develop new frameworks to accommodate digital assets in the real world. Lee believes that a declaration for the side of cryptos would push Bitcoin into a rally.

He also went on to say that only 10 days comprise all the performance in one year of Bitcoin’s price. Without those 10 days, Bitcoin is only down by 25% in a year. He also said:

“So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,”

Bitcoin is currently trading around the $7500 mark, after suffering a flash drop from $7918 to $7520. Twitterati commented, with user Yogesh saying, “Is CME futures expiry got to do something with this fall?” Digger said: “Did it brake the lower trend or we are still in the hope situation?”

Whatever the impetus for Bitcoin’s renewed push to the downside Thomas Lee isn’t backing down. And that gives HODL’ers everywhere a bit of hope as they grin and ‘bear’ this market. Should his prediction come true he’ll become a Bitcoin hero even more so than he is today.

As always, with respect to any price and time predictions, the clock and charts will ultimately tell the tale.