n The secretary of Hong Kongs financial watchdog has stated that illicit crypto mining operations are subject to local trading lawn
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Bitcoin Hasn’t Performed Well in 2018 But Analysts Say It’s Just Fine to Hold BTC
The performance of Bitcoin (BTC) over 2018 hasn’t been pretty — that goes without saying. Yet, taking a step back, many optimists would argue that it is more than apparent that crypto assets are doing just fine. Case in point, the asset ran from sub-.01 to an all-time high of ,000 in a decades’ time, outperforming any other investment opportunity that has existed, ever.
And while prospects look dismal for Bitcoin’s remaining holders, believed to be few and far between, some claim that copious upside might just be inbound.
1% Bitcoin, 99% USD Portfolio Outperformed S&P 500 Over Past Decade
A common criticism thrown at BTC believers is that “it’s risky.” According to the data seen through the eyes of crypto researcher PlanB, from a long-term perspective, the cryptocurrency is far from. In a recent Twitter thread that garnered the attention of Anthony Pompliano, PlanB explained that a 1% BTC and 99% cash portfolio beat the performance of the S&P 500 over the last ten years.
Related Reading: Crypto VC: Bitcoin And S&P 500 Trading At Near-Zero Correlation
Holding 99% cash and 1% Bitcoin over the last 10 years was a better investment than investing in the greatest stock market bull run in history.
Crypto will outperform stocks for next 10 years too. https://t.co/KPVr4ymN4X
— Pomp
(@APompliano) February 3, 2019
Although the difference between the two portfolios was marginal, with mere percentage points separating their performance, PlanB claimed that Bitcoin simply has a better risk-to-return profile than U.S. equities.
Commenting on the subject matter in a follow-up tweet, PlanB explained that while BTC’s yearly returns range drastically, from -80% to 1,000%, there is an “opportunity to tame risk by resizing [your position].”
In response to this remark, one of the commentator’s followers, who goes by the “Wall St. Dropout” moniker, noted that even a portfolio with a 1% allocation into Bitcoin that is rebalanced yearly makes sense. And with this in mind, the investor added that it makes sense for institutions, whether it be hedge funds, venture groups, and other Wall Street mainstays, to make a foray.
To back his point, he drew attention to data gathered by Hedge Fund Research and Bloomberg, compiled by the Financial Times, which indicates that funds’ annual returns have waned. From 1989 to 1999, as the Dotcom bubble was ramping up, the average hedge fund posted 18.3% per annum. The next decade, 6.4% a year. And even over the past decade, as stocks have begun to trade at their “most obscene valuations in U.S. history,” performance posted by Wall Street hotshots isn’t all too pretty. 3.4% — that the type of average yearly returns we’re talking about.
PlanB, issuing a statement in response to the harrowing Financial Times chart, added that he can “100% confirm” that institutional money is looking at this data, specifically in a bid to improve returns through diversification.
Why Does A Crypto Allocation Make Sense?
This may leave some wondering, why would Wall Street siphon money into Bitcoin? The returns, that’s why.
As explained earlier, a mere 1% allocation into the cryptocurrency, coupled with 99% of depreciating fiat, has ousted the entire S&P 500 over the past decade.
![](https://www.newsbtc.com/wp-content/uploads/2019/01/shutterstock_1025239828-e1547958958429.jpg)
Holding Bitcoin can’t hurt… right?
There’s a chance that Bitcoin could continue to trade within a relatively tight range, with little volatility no less — thus defeating the diversification theory. Yet, most believe that it is only a matter of time before BTC heads to the moon, as crypto’s diehards and content creators like to say.
Over the past few months, an array of industry pundits have done their best to rationalize where cryptocurrencies could head in the coming years. One optimistic analyst, Filb Filb, noted that per his compilation of the Internet’s historical growth cycles, Bitcoin’s adoption curve, among other fundamentals factors, 3,000 for each Bitcoin could make sense eventually. He even explained that the asset could swell well beyond the one million dollar range.
Even if BTC follows conservative estimates, portfolios with the asset in-hand would likely outperform their so-called “nocoiner” (don’t hold cryptocurrency) counterparts. Per previous reports from NewsBTC, a survey conducted by crypto investment group Bitwise Asset Management indicates that investment/wealth advisors are bullish on BTC. 55% of the 150 advisors surveyed believed that BTC would appreciate in value in the next five years, with predictions averaging out to ,570.
The now-tamed Tom Lee, the head of research at Fundstrat Global Advisors, recently remarked that ,000 is a “fair value” for the leading cryptocurrency, citing the thirst for an uncorrelated digital asset that isn’t only used for speculative purposes, but as a newfangled form of money and store of value too.
Featured Image from Shutterstock
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Bitmain’s Struggle is Real But Analyst Says Crypto Miners are Fine
Just in the past two months, Bitmain has fired more than half of its staff, has closed an entire office in Tel Aviv, has shuffled top management, and removed two of its chief operations officers. And today, the Chinese bitcoin mining giant decided that it would close another overseas workplace – this time in Amsterdam.
But Eric Conner, the founder of Eth Founder, believes that the health of miners does not impact the crypto space.
Mining is Just a Service
In his latest tweet, Conner requested the crypto community to stop thinking much about miners, stating that they won’t hold any relevance to the overall growth of the crypto space.
“Honestly, I wish we’d stop worrying about miners so much,” said the cryptocurrency analyst. “They provide a service to what Ethereum users decide they want to run. I don’t think they should have a say in governance decisions. In [two] years we won’t need them. Let’s quit wasting so much time worrying about them.”
Conner didn’t mention Bitmain specifically, but his statement came at a time when the Beijing-based company is shrinking at a rapid pace. The year-long crashing in the value of leading cryptocurrencies has led mining companies like Bitmain to huge losses. Also, the infamous Bitcoin Cash hash war in November reportedly caused the company additional losses worth millions of dollars.
Ethereum, which was a part of Bitmain’s mining portfolio, meanwhile announced that it would switch its core consensus algorithm from proof-of-work to proof-of-stake. By doing so, Ethereum replaces miners with validators.
“These validators vote on the next block, and the weight of each validator’s vote depends on the size of his stake,” explained Johannes Hagemann, a software programmer, and Ethereum enthusiast. “To become a validator, you have to send a special type of transaction that locks up your ether into a deposit. The amount of ether someone locks up is his stake. The validators get a reward for their service, like in a PoW blockchain.”
The PoS protocol expects to remove expensive ASIC machines used by miners like Bitmain to stay ahead in mining crypto blocks. According to Conner, whether or not these companies will survive the crypto winter does not matter – at least to Ethereum that is reducing its dependence on them.
What of Bitmain, Then?
Bitmain is imploding. The company in 2017 scaled against the expected demand for its mining operations. It is now waiting to scale back to match the real market demand, which means it will reduce its expansion plans. The process is typical for any industry and Bitmain is no different. Either it would keep shrinking to address a small market or would entirely close down its operations – as many small miners had done.
Bitmain currently holds 1097 ETH tokens, according to a leaked financial report, so it could still become a stakeholder in the new Ethereum protocol. Nevertheless, its poor health remains troublesome for Bitcoin, Litecoin and Bitcoin Cash – the coins it holds in large and could encash in the event of crash scarcity.
The post Bitmain’s Struggle is Real But Analyst Says Crypto Miners are Fine appeared first on NewsBTC.
Bitcoin Isn’t the Currency for Money Laundering, US Bank Pays $613m Fine
Money laundering has always been a big problem in the financial sector. Turning “dirty” money into “clean” money makes it nearly impossible to trace criminal activity. One could argue money laundering is a sold as the banks themselves. US Bancorp is fined 3m to settle “willful” violations of the Bank Secrecy Act. It is once again evident financial institutions are the go-to solution to launder money. Cryptocurrencies such as Bitcoin, on the other hand, are very small fish in this cesspool.
Addressing money laundering problems is not easy by any means. With so many people involved in these processes, it’s only natural some transactions go by unnoticed. Banks staffers often fail to recognize or report suspicious transactions. In the case of US Bancorp, it will cost them a hefty penny. With 3m in fines to be paid, some bank members will be to blame. It also shows how relatively easy it is to launder funds through the banking system. There are quite a few institutions who either don’t flag transactions or do not bother to deal with the reporting side of things.
US Bancorp Fined for Money Laundering
Most of the fines will be paid to the US Treasury. The remainder will go to FinCEN, The Federal Reserve, and the Office of the Comptroller of the Currency. While such a fine is steep, it’s usually a drop in the bucket. Entities such as US Bancorp can make a lot more money from processing these illicit transactions like normal. They collect fees for every transaction, after all. This fine will not necessarily make any big dent in their earnings. More worryingly, people will probably forget US Bancorp was even involved in this scandal in a few months from now.
It is uncanny how these are the same banks who tell people Bitcoin is a tool for criminals and terrorist. Unlike the systems used by US Bancorp and consorts, Bitcoin is as transparent as it can get. There is a degree of pseudonymity, but people can flag transactions in real-time. All information other than users’ identities is public and traceable. Converting Bitcoin to real money needs to be done through brokers or exchanges. These companies perform checks to prevent money laundering as well. It is very cumbersome to cash out crime proceeds with Bitcoin as of right now.
Even then, the converted money is still processed by banks. If they do not perform proper AML checks, bitcoin isn’t to blame for their shortcomings. US Bancorp and consorts need to be punished far more severely for failing to adhere to regulatory guidelines. They have all of the information on hand to flag, track, and identify suspicious behavior in a few minutes. Why they aren’t doing so is anybody’s guess right now. Money laundering will always be facilitated by the banking system.
The post Bitcoin Isn’t the Currency for Money Laundering, US Bank Pays 3m Fine appeared first on NewsBTC.
PlexCoin Founder Gets Jail Time, Fine on Contempt Charge
U.S. and Canadian authorities appear determined to make an example of an ICO believed to have raised million.
CoinDesk
Connecting the Luxury Fine Art Industry with the Modern Digital Economy
Latest figures from the Tetaf art market report,released by the European Fine Art Foundation, show that in 2016 global art market sales amounted to an estimated billion, up 1.7 percent from 2015. The U.S. remains the largest country in the world art market, with 29.5 percent of the market share, followed by the U.K. and China with 24 percent and 18 percent, respectively.Yet, while the industry remains a profitable one, it is slowly changing. One that is considered difficult to enter and r
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