Bitcoin: diamond in the world’s dumpster fire?

Data by Bloomberg show Bitcoin’s price correlation to gold doubling over the last three months.

I write a newsletter on Bitcoin and cryptocurrency every Sunday morning that reaches thousands in North America. Got this from a friend? Sign up here. — E

Bitcoin could reach record highs if the United Kingdom leaves the European Union without a deal, according to some cryptocurrency analysts.

Not replacing the EU’s trade deals and treaties with the U.K.’s own causes “turmoil and volatility,” one analyst said. That compounds on the rising trade tensions between the United States and China, bludgeoning financial markets.

That uncertainty has traditionally caused investors to take money out of conventional instruments and put them into so-called safe-haven assets such as gold. Unlike, say, a company’s stock or a country’s currency, gold’s price is largely immune to geopolitical factors.

Because of Bitcoin’s decentralized nature, it has that same appeal as gold, perhaps more. Data by Bloomberg show Bitcoin’s price correlation to gold doubling over the last three months.

In Hong Kong, social unrest has already caused Bitcoin to trade at a 2 per cent premium.

Bitcoin is emerging as a possible diamond in the world’s dumpster fire.

Bitcoin is at $10,364 (C$13,759) as of 12:30 p.m. Eastern Time, down almost 10 per cent for the week, but it can rise to touch $11,000-levels, technical analysis shows. The world’s largest cryptocurrency began the last seven days tumbling, recovering ground only in the middle of the week.

World: Barclays drops Coinbase; Huobi’s alleged leak

The big British bank Barclays is no longer providing services to the major cryptocurrency exchange Coinbase, compounding the U.S. platform’s problems that include a high-profile domestic lawsuit and the repeated leaving of notable staff.

It appears the major Hong Kong exchange Huobi has also experienced a leak of user information, following a similar incident with the Malta-registered Binance, the world’s largest such platform. Like Binance, Houbi casts doubt on the information’s legitimacy, but stops short of a denial.

Craig Wright, the Australian who says he created Bitcoin, is accused of faking documents — using a software that did not exist at the time — in his civil trial for allegedly stealing the bitcoins of a former business partner. Wright also fails to get the case dismissed.

Canada: cryptocurrency incidents tripled over past year

Canada’s anti-money laundering watchdog referred 61 cryptocurrency-related incidents to law enforcement in the past fiscal year, more than triple the number the previous year. Experts predict that figure will skyrocket next year, when virtual currency exchanges officially come under the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC).

Yuan-coin! China confirms its digital currency is ready

A senior official at China's central bank announced on Saturday the country will soon roll out its own sort of cryptocurrency.

I write a newsletter on Bitcoin and cryptocurrency every Sunday morning that reaches thousands in North America. Got this from a friend? Sign up here. — E

A senior official at China's central bank announced on Saturday the country will soon roll out its own sort of cryptocurrency.

While there are few details beyond the fact that the coin will not be entirely based on blockchain, the official said the "People's Bank digital currency can now be said to be ready."

That comes at a significant time. A People’s Bank of China official has said Facebook’s Libra has forced the institution to step up creation of its own digital currency — a move central banks around the world are also exploring. The Asian country’s formerly dismissive attitude toward Bitcoin has been shifting.

Let’s not forget, though: a central bank digital currency will likely be no different from Facebook’s Libra — cryptocurrency only in name.

In a country accused of overwhelming electronic surveillance, and where personal privacy is increasingly being eroded, a government digital currency might just be really scary.

Bitcoin price: hanging close to support; could fall

Bitcoin is at $11,354 (C$15,073) as of noon Eastern Time, up 3 per cent for the week, but hanging close to support levels and can fall in the short term, technical analysis shows. Bitcoin had surged to above $12,000 in the middle of the week, buoyed by U.S.-China trade tensions.

World: Binance customer info allegedly leaked

Malta-registered Binance, the world’s largest cryptocurrency exchange, is investigating an alleged leak of its customers’ identification documents. The leak, reportedly related to a 7,000-bitcoins hack last May, could affect up to 60,000 users. Binance casts doubt on the documents’ legitimacy, but stops short of a denial.

A lawsuit against Coinbase’s alleged botched 2017 listing of the Bitcoin offshoot Bitcoin Cash (BCH) will proceed to trial. New York’s Coinbase is a major U.S. exchange platform. The case’s outcome could affect how it and its peers list new cryptocurrencies.

Canada: Blockstream unveils secret mining sites

Blockstream, of the Canadian city of Victoria, British Columbia, has revealed massive Bitcoin mining sites in the country’s Quebec province and the U.S. state of Georgia. The facilities’ electricity total 300 megawatts, capable of comprising almost 8 per cent of the entire Bitcoin network.

Cole Diamond, chief executive of Canada’s largest exchange, Toronto’s Coinsquare, has praised Bitcoin Satoshi’s Vision (BSV), an offshoot of Bitcoin Cash. Such offshoots are born amid in-fighting in the coins’ communities, often wreaking havoc on price.

A Bitcoin scammer targets the wrong man, Ben Perrin of the western Canadian city of Calgary, who runs a cryptocurrency YouTube channel. The scammer gets scammed.

Bitcoin exchange (name) in (country) hacked for (amount)

Anyone can start a Bitcoin exchange. Such platforms can be incredibly risky.

I write a newsletter on Bitcoin and cryptocurrency every Sunday morning that reaches thousands in North America. Got this from a friend? Sign up here. — E

(Founder of Japan’s ill-fated Mt. Gox Bitcoin exchange Mark Karpeles sits on an exercise ball in a Reuters interview.)

A cryptocurrency exchange platform has halted services after it lost millions of dollars in a hack.

What is that referring to? Japan’s Coincheck last year? South Korea’s Youbit in 2017? Japan’s Mt. Gox in 2014? Australia’s Cryptopia this year? Japan’s Remixpoint last month?

No, it’s Japan’s Bitpoint. Last week.

Then there are the exchanges whose users say they cannot withdraw their money — CTV has followed up on my story about Vancouver’s ezBtc.

As well, there are the exchanges accused of high-level, regulatory mishaps: two of the world’s largest, Bitfinex and BitMEX, both headquartered in Hong Kong.

Anyone can start an exchange. Such platforms can be incredibly risky.

But ironically, these platforms — gateways to buying cryptocurrency — have the most money, presence and voice in this realm. They are seen as representatives.

Terrible combination. It takes only a minority for the troubles of such platforms to boil over.

When that happens — regulatory response, public sentiment and price action — it will be ugly.

Bitcoin price: bullish momentum rises from 5-month lows

Bitcoin is rising to test levels of $11,000, although it may suffer brief pullbacks in the process, analysis shows. The world’s largest cryptocurrency is at $10,965 (C$14,506 ) as of noon Sunday, Eastern Time, up more than 15 per cent for the last seven days. Bitcoin spent the week on a nearly uninterrupted rise.

World: China’s miners seek IPO — in U.S.

China’s Canaan Creative, which makes cryptocurrency mining chips, is following its rival Bitmain Technologies in seeking an initial public offering (IPO) in the United States, reviving previously abandoned plans in Hong Kong.

An influential U.S. lawmaker — chair of a committee that deals with such matters — says the country will not succeed in banning Bitcoin if it tries.

LedgerX, which says it has obtained U.S. approval for Bitcoin-backed futures contracts, has in fact not obtained said approval. That product would have been the first such mainstream investment instrument backed by actual bitcoins.

Walmart has applied to patent a way to use a digital coin, just like Facebook’s Libra coin, even as it says it doesn’t have any plans “at this time.”

Canada: C$1.1 mln for Quadriga lawyers, accountants

A judge has approved more than C$1.1 million in fees for lawyers and the accounting firm probing the controversial demise of Vancouver’s QuadrigaCX cryptocurrency exchange. Users are claiming more than C$214 million from the platform after its founder died.

Last paragraph: MailChimp ditched for Substack

Hey there, if you noticed something different about this week’s edition — I’ve switched to a different newsletter platform, Substack, ditching MailChimp. All the cool kids seem to be on here. Substack also allows me to charge for subscriptions, which is something I’m considering — readership has grown a lot over the past months. Everyone already on here will be grandfathered in should I decide to start charging, of course. — E

2nd Vancouver exchange, ezBtc, in turmoil

I write a newsletter on Bitcoin and cryptocurrency every Sunday morning that reaches thousands in North America. Got this from a friend? Sign up here. — E

2nd Vancouver exchange, ezBtc, in turmoil

Vancouver's David Smillie left a high-flying television career and caught the crypto-wave. Now his Bitcoin exchange ezBtc is accused of owing more than C$60 million. (Facebook)

In a long-form piece in The Tyee, I reveal the rise and tumultuous path of ezBtc, a Vancouver-spawned exchange that has barred new registrants after being accused of owing more than C$60 million.

Its founder, the Vancouverite David Smillie, left a high-flying television career in 2016 and caught the crypto-wave. Now users say his exchange is refusing to process their withdrawals. Smillie, who denies the allegations, is marred in lawsuits, his prized company under siege.

Sound familiar? It was a similar story with the ill-fated QuadrigaCX, also from Vancouver.

Also, I write in the Globe and Mail that our current system of paper court rulings and judgments comes with high costs and inefficiency, and that the solution is blockchain.

The good folks at the Globe let me use a Game of Thrones reference at the end, and I’m grateful.

World: new U.S. rules; China on Tron-Buffet

U.S. regulators are likely to issue new cryptocurrency rules to ensure they don’t disturb the financial system, although it is unknown when.

Tron’s Justin Sun, a Chinese blockchain pioneer, has put off a high-profile charity lunch with the billionaire cryptocurrency skeptic Warren Buffett and grovelingly apologized in Chinese for “over-marketing.” Sun’s contrition sounds similar to that of other Chinese public figures, who publicly apologized amid criminal investigations.

Turns out, every company Facebook says is backing its Libra cryptocurrency has signed only “a nonbinding letter of intent,” said the chief executive of Visa. “So no one has yet officially joined.” Meanwhile, the United Kingdom wants to probe Libra, and Facebook is being accused of stealing the code for the cryptocurrency.

The owner of the New York Stock Exchange will release Bakkt the third quarter of this year. Bakkt provides a Bitcoin-backed futures contract, a mainstream investment instrument.

Bitcoin price: bullish momentum on low

Bitcoin may fall further, its bullish momentum falling to five-month lows, analysis shows. The world’s largest cryptocurrency is at $9,491 (C$12,519) as of noon Sunday, Eastern Time, down nearly 10 per cent for the last seven days. Bitcoin spent the week in decline, despite a small bump on Wednesday that sent it above the $10,000 psychological barrier.

Canada: CoinLaunch in trouble in Ontario

The Ontario Securities Commission regulator has settled with the Toronto-area CoinLaunch Corp. for an initial coin offering (ICO), over allegations the firm traded securities without being registered. The company, which advises on launching ICOs, is winding down.

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Facebook: enemy of my enemy of my enemy

I write a newsletter on Bitcoin and cryptocurrency every Sunday morning that reaches thousands in North America. Got this from a friend? Sign up here. — E

Facebook: enemy of my enemy of my enemy

Mr. Facebook went to Washington in the past week, the head of its proposed Libra coin appearing before Congress.

Democrat and Republican U.S. lawmakers were united in bashing Facebook, saying the company had not shown it could be trusted to safeguard the world financial system and consumers’ data.

Strange bedfellows Facebook has made — and it gets stranger.

Lawmakers talked about the potential centralization and concentration of power in Facebook if it launches its own currency.

It’s almost as if they see the merit of another digital currency whose sole purpose and nature is the opposite. (Hint: it starts with a B.)

Oh wait, they did. The Republican congressional leader said, “I like Bitcoin,” as he bashed Libra.

And then, there is another Republican lawmaker who said, “There's Bitcoin, and then there's shitcoin,” implying Libra is the latter.

Ironically, it’s taken a major technology company to make all lawmakers and even digital currency enthusiasts stand on the same side.

Bitcoin price: BitMEX U.S. probe bears down

Bitcoin may fall further, as the major exchange platform BitMEX faces a regulatory probe amid talks of harsher cryptocurrency rules, analysis shows. Hong-Kong-based BitMEX — the second-largest exchange and the preferred platform for complicated trades — officially bans territories including the United States and Quebec for regulatory reasons. But American authorities say their residents may have been able to use the exchange anyway.

The world’s largest cryptocurrency is at $10,376 (C$13,564) as of noon Sunday, Eastern Time, down about 2 per cent for the last seven days. Bitcoin fell briefly below $10,000 in the middle of the week, breaching that psychological barrier for the second time this month.

Canada: Coinberry targets municipalities

Toronto’s cryptocurrency brokerage Coinberry has been targeting Canadian municipalities. It has roped in a second lower-level government — Richmond Hill, Ont., just north of Toronto — to use its platform to allow cryptocurrency payment options for local taxes.

A Toronto law professor writes in the Globe and Mail that cryptocurrency can survive only if its users compromise in the face of the regulatory spotlight. Sounds familiar? I said the same thing a month ago in a book review, and even our headlines are similar.

World: Iran turn to Bitcoin amid sanctions

Iranians feeling the squeeze from U.S. sanctions targeting the Islamic Republic’s ailing economy are increasingly turning to such digital currencies as Bitcoin to make money, prompting alarm in and out of the country.

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