Bitcoin and NFTs

[Ginger Yellow]

More adventures in crytpocurrency as a store of value.

According to White, the multimillion dollar market sell order resulted in a number of orders being filled from $317.81 to $224.48.

As the price continued to fall, another 800 stop loss orders and margin funding liquidations caused ethereum to trade as low as 10 cents.

[Ginger Yellow]

Can we talk about the ongoing ICO bubble? It seems totally insane to me. I've heard it suggested that almost everyone participating are people who got crypto-rich dabbling with BTC and ETH, so it doesn't matter that they're throwing hundreds of millions of dollars "worth" of money at obvious scams and pie-in-the-sky schemes. But I find it hard to believe that's true of everyone, not least because of every asset price bubble attracts a load of naive/reckless/gullible retail investors, especially in places like China, which is the epicentre of the crypto bubble anyway.

I guess my question is can the authorities really allow this to continue without stepping in and imposing securities offering laws, or at a minimum investment management rules? And when do they start cracking down on the fraud?

[Ginger Yellow]

Turns out ICOs don't even have to be scams for investors to lose their money.

[ursus arctos]

There is a ridiculous amount of dumb money sloshing around in the system at the moment

[Stumpy Pepys]

Isn't there some sort of graphics card shortage at the moment? People buying them to mine cryptocurrency.

[ursus arctos]

More dumb money

As the price of ether has declined over the past month, e-commerce websites like eBay have seen an increase in users seeking to sell graphics processing units (GPU) used in ethereum mining.

The native cryptocurrency on the ethereum blockchain, ether had recorded strong gains in 2017, rising from just under $10 on January 1, to a high of more than $400 on June 12. However, as excitement for the emerging technology cools, and the economics of the network evolve, prices have dropped, declining to a low of $133 over the last weekend.

While the price has dipped alongside cryptocurrencies, an unexpected side effect unique to ether is that the market now seems flooded with used GPUs for ethereum mining.

The search term "ethereum mining rig," for example, shows 260 entries on eBay – all of which went online after June 11 this year except three. Half were published during last week when ether price dropped below $200.

[Ginger Yellow]

And somewhere for the dumb money to go

[Ginger Yellow]

Well, that was quicker than I expected, especially under Clayton.

[ursus arctos]

Not the kind of thing that he, S&C or Goldman are invested in (literally or figuratively)

[Ginger Yellow]

True enough, I guess. I just expected the SEC to have bigger things on its plate with the Treasury pushing it to roll back most of Dodd Frank. And it's not like they've really been proactive on crypto so far.

[Ginger Yellow]

In today's blockchain simplicity ruined by pesky human behaviour news...

After the methodology announcement on July 27th, several accounts began large-scale manipulation tactics in an attempt to obtain BCH tokens at the expense of exchange longs and lenders on the platform, causing the distribution coefficient to artificially plummet

[Snake Plissken]

I'm not entirely sure it is Bitcoins fault that people insist on being able to buy and sell things that a) they don't own and b) don't actually exist.

[Guy Profumo]

I'm not entirely sure it is Bitcoins fault that people insist on being able to buy and sell things that a) they don't own and b) don't actually exist.

Quite.


I blame Thatcher.

[Ginger Yellow]

No, but it is the fault of Bitfinex (which after all facilitated the shorting) for failing to anticipate a painfully obvious arbitrage

[caja-dglh]

I must have read five articles about the bitcoin split and I still seriously have no idea what is going on.

[ursus arctos]

Dumb money is getting fleeced again.

Today and every day.

[ad hoc]

Bitcoin and its economics seems deliberately obtuse though. Almost like it's designed to be so utterly confusing to the average punter that they'll never think to get involved. It's a bit like the concept of the Holy Ghost in Catholicism. Nobody who hasn't been through 15 years of theological school (or in this case, has tracked, bought, sold, and otherwise been brainwashed into bitcoin lore) can remotely understand what it is supposed to be thereby leaving "knowledge" only available to the select few.

[Ginger Yellow]

You get an enforcement action! And you get an enforcement action! Everyone gets an enforcement action!

Since the guidance was released on July 25, 46 new coin offerings have been announced and an additional 204 are moving toward fund-raising, according to data from Tokendata.io. In contrast, only three projects have said they are canceling or postponing the sale of coins because of the warning.

[ursus arctos]

The only people stupider than the ones putting these into the market are those that invest in them.

Barnum really was right.

[Ginger Yellow]

Peak blockchain bollocks? It's a loyalty card, not an "investment vehicle".

[beak]

Peak blockchain bollocks?

it's good, but it's not even close

as an aside i'm currently working on a project that, for reasons far beyond either my control or understanding, involves (as one element amongst others) the use of the blockchain to support registries for the collection/sale of media- and software-based art. it's only been two weeks like, but the whole thing sounds like bollocks to me.

[Ginger Yellow]

Remind me never to call peak blockchain bollocks.

[Ginger Yellow]

Meanwhile, China has banned ICOs, and the SEC seems to be flexing its muscles, albeit with small fry.

[Ginger Yellow]

Exchanges now too.

[Ginger Yellow]

Pretty weak guidance from the FCA on ICOs. Ostensibly in line with the SEC letter but much less clear about what the law entails and suggests they're not going to be proactive about it. Then again, can't imagine all that many are coming out of the UK.

The term ICO refers to a digital way of raising funds from the public using a virtual currency, also known as cryptocurrency. An ICO can also be known as ‘token sale’ or ‘coin sale’.

ICO issuers accept a cryptocurrency, like Bitcoin or Ether, in exchange for a proprietary ‘coin’ or ‘token’ that is related to a specific firm or project. ICOs vary widely in design. The digital token issued may represent a share in a firm, a prepayment voucher for future services or in some cases offer no discernible value at all. Often ICO projects are in a very early stage of development.

ICOs are very high-risk, speculative investments.

You should be conscious of the risks involved (highlighted below) and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake.



What are the risks?

Unregulated space: Most ICOs are not regulated by the FCA and many are based overseas.
No investor protection: You are extremely unlikely to have access to UK regulatory protections like the Financial Services Compensation Scheme or the Financial Ombudsman Service.
Price volatility: Like cryptocurrencies in general, the value of a token may be extremely volatile – vulnerable to dramatic changes.
Potential for fraud: Some issuers might not have the intention to use the funds raised in the way set out when the project was marketed.
Inadequate documentation: Instead of a regulated prospectus, ICOs usually only provide a ‘white paper’. An ICO white paper might be unbalanced, incomplete or misleading. A sophisticated technical understanding is needed to fully understand the tokens’ characteristics and risks.
Early stage projects: Typically ICO projects are in a very early stage of development and their business models are experimental. There is a good chance of losing your whole stake.


Are ICOs regulated by the FCA?

Whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided case by case.

Many ICOs will fall outside the regulated space. However, depending on how they are structured, some ICOs may involve regulated investments and firms involved in an ICO may be conducting regulated activities.

Some ICOs feature parallels with Initial Public Offerings (IPOs), private placement of securities, crowdfunding or even collective investment schemes. Some tokens may also constitute transferable securities and therefore may fall within the prospectus regime.

Businesses involved in an ICO should carefully consider if their activities could mean they are arranging, dealing or advising on regulated financial investments. Each promoter needs to consider whether their activities amount to regulated activities under the relevant law. In addition, digital currency exchanges that facilitate the exchange of certain tokens should consider if they need to be authorised by the FCA to be able to deliver their services.



Should I report ICOs to the FCA?

If you suspect that an ICO is a scam, report it to the FCA via our online form at https://www.fca.org.uk/consumers/rep...uthorised-firm.

To learn more about general warning signs of scams, visit our ScamSmart website at https://www.fca.org.uk/scamsmart.