As the U.S. stock market scales new heights, a growing chorus of analysts warns that a severe crash could be on the horizon, reminiscent of the devastating 1929 collapse. Concerns center around the meteoric rise of Nvidia and the burgeoning artificial intelligence (AI) sector, feared to be the latest bubble in a pattern echoing past […]
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Coinbase Institutional Analyzes Upcoming Bitcoin Halving, Drawing Parallels to 2018-2022 Cycle
In its latest “Halving Handbook,” Coinbase Institutional draws striking comparisons between the upcoming Bitcoin halving and the market cycle from 2018-2022, offering insights into the potential impacts on the crypto economy. Coinbase’s Halving Handbook The next Bitcoin halving, set for mid-April 2024, is poised to slash miner rewards from 6.25 BTC to 3.125 BTC, a […]
Bitcoin News
All I Had Was a ‘Simple Calculator’ — Former Mt Gox CEO Draws Parallels With Bankman-Fried’s Journey
Sam Bankman-Fried, the former CEO of FTX, has been denied temporary release from prison after his legal team complained about his ability to prep for trial and his laptop’s alleged lack of internet access. On Tuesday, the former CEO of Mt Gox, Mark Karpeles, shared his experience after he was arrested in 2015 on charges of embezzlement and breach of trust. Karpeles stressed that the “most computing power” he got was a “simple calculator” in addition to 20,000 pages of evidence and 5,000 pages of accounting records.
‘The Calculation I Did at the Time Helped Me to Earn Release’ — Mark Karpeles Recounts the Embezzlement Case Against Him
Mark Karpeles, the former CEO of Mt Gox, one of the most recognizable bitcoin exchange breaches in history, has compared his trial experience to Bankman-Fried’s on the social media platform Twitter. Karpeles’ comments follow U.S. District Court judge Lewis Kaplan’s decision Tuesday to keep Bankman-Fried in prison.
Prior to the judge’s decision, Bankman-Fried’s lawyers said he hasn’t been getting adequate access to the internet in jail to prepare for his upcoming trial next month. The U.S. government insisted Bankman-Fried’s accessibility to a laptop and the internet was sufficient.
Karpeles explained Tuesday that he wasn’t afforded such luxuries during his time in jail when he was arrested and detained in Japan on charges of breach of trust and embezzlement.
“When I was arrested back in 2015, the most computing power I got was a simple calculator (+-*/√),” Karpeles stated. “Had 20,000 pages of evidence including over 5,000 pages of accounting. [The] calculation I did at the time helped me to earn release under bail and eventually be cleared of all embezzlement [and] breach of trust charges.”
Karpeles continued:
I spent a total of 11 months and 15 days in pre-trial detention, and didn’t have access to any of the evidence until about 7 to 8 months in. The jail’s store had some label stickers and folders I used to create an index of all the evidence I was sent by my lawyer, and I created a quick 8 pages index listing all the documents found in there by an ID I created at the time including the number of pages, who made the document, and which folder it was in.
Over the following months, Karpeles said he delved deep into the accounting data presented by the prosecution. To his surprise, there were significant profits that had been overlooked. Karpeles said he sifted through the company’s bank statements — included in the evidence — and discovered .5 million in revenue that had gone unaccounted for.
“Suddenly, the argument raised by the prosecution didn’t make sense,” Karpeles wrote. “The company made more than what was spent, and using this as a base my lawyer pushed the prosecution to straighten up their act.”
Armed with this information, his attorney pressured the prosecution to reassess their stance. Seeking additional time to solidify their case, the judge saw it fit to grant Karpeles bail. The former Mt Gox CEO concluded:
After being freed on July 14, 2016, I was finally able to get online after almost a year. A lot had changed, SSL certificates were now available for free and it was a new world, but Bitcoin’s block size battle was still raging on.
What do you think about the former Mt Gox CEO’s memories compared to Bankman-Fried’s situation? Share your thoughts and opinions about this subject in the comments section below.
Market Strategist Draws Parallels Between Bitcoin and 1930 Stock Market Crash
Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, has explained that bitcoin appears similar to the stock market in 1930. At that time, elevated equity prices led to the stock market losing almost 90%. The crash of 1929, also called the Great Crash, contributed to the Great Depression which lasted approximately 10 years.
Bitcoin v Stock Market in 1930s
Mike McGlone, a senior commodity strategist for Bloomberg Intelligence (BI), the research arm of Bloomberg, has pointed out the similarity between bitcoin and the stock market in 1930. He tweeted on Monday:
One of the best-performing assets in history and a leading indicator — bitcoin — appears similar to the stock market in 1930.
“Statistician and entrepreneur Roger Babson began warning about elevated equity prices well before economist Irving Fisher proclaimed a ‘permanently high plateau’ in 1929,” the commodity strategist added, emphasizing: “The Fed tilts our bias toward a stance similar to Babson’s.”
Babson told a National Business Conference in Massachusetts in September 1929 that “sooner or later a crash is coming which will take in the leading stocks and cause a decline from 60 to 80 points in the Dow-Jones barometer.”
The Dow Jones Industrial Average increased nearly six-fold from sixty-three in August 1921 to 381 in September 1929. The epic boom culminated in a catastrophic crash. From April 1930 to July 1932, the Dow suffered a loss of 89.2%. The stock market crash of 1929, also called the Great Crash, contributed to the Great Depression of the 1930s which lasted approximately 10 years.
The Federal Reserve has increased interest rates to the highest level in 22 years, as it continues to fight persistent inflation in the U.S. economy. In July, the Fed raised its key interest rate by 25 basis points to a range of 5.25%-5.5%. Fed officials have said that more rate hikes may be needed to bring inflation down toward the central bank’s 2% target.
Do you agree with Bloomberg Intelligence strategist Mike McGlone about bitcoin and the crypto’s similarity to the stock market in 1930? Let us know in the comments section below.
Crypto YouTuber Draws Parallels Between SafeMoon and Bitconnect
Popular crypto YouTuber Lark Davies tweeted a warning over the new Binance Smart Chain project SafeMoon. He likened its rising popularity to the now-defunct Bitconnect scam, saying the euphoria of gains is blinding users to “the obvious.”
Bitconnect arrived on the scene in 2016, promising high returns for holding, trading, lending, and mining its BCC token. But things began unraveling in January 2018 when Texas and North Carolina regulators issued a cease and desist order. Bitconnect has earned a place in history as one of cryptocurrency’s biggest scams. But, is Davies right to lump SafeMoon in with the same company?
Bitconnect was for a brief moment a top 10 #crypto, the people making money did not want to accept it was a ponzi, they made every excuse to justify it, and attacked anyone who stated the obvious.
Then it rug pulled and everyone lost big time. #safemoon is no different.
— Lark Davis (@TheCryptoLark) April 21, 2021
What is SafeMoon?
SafeMoon launched last month on March 14 with a debut price of .00000008. Since then, particularly over the last week or so, its price has mooned. SafeMoon is up +980% over the last seven days, hitting an all-time high of .00000919 yesterday.
Source: SAFEMOONUSD on CoinGecko.com
SafeMoon is an auto-generating liquidity protocol that rewards holders and penalizes sellers. It imposes a 10% penalty on sellers and redistributes 5% to existing holders, while it’s unclear who directly benefits from the other remaining 5%.
“5% fee is split 50/50 half of which is sold by the contract into BNB, while the other half of the SAFEMOON tokens are paired automatically with the previously mentioned BNB and added as a liquidity pair on Pancake Swap.”
The project describes itself as a “community driven, fair launched DeFi Token.” It talks about three simple functions, those being Reflection, LP Acquisition, and Burn.
Its whitepaper says “Reflection” relates to the concept of static rewards, which they say tackles the problem of falling APYs and encourages users to hold on to their tokens.
“LP Acquisition” relates to their mechanism of matching buyers and sellers, which they say creates a “solid price floor,” therefore minimizing price dips.
As the term suggests, ” Burn” relates to the burning of tokens, but in a documented and transparent way. The theory here is to reduce supply and therefore increase the value of tokens.
Some point out that the setup is similar to a Ponzi scheme. SafeMoon’s success relies upon more and more people buying in and holding – a model it encourages by penalizing sellers.
However, some have praised SafeMoon CEO John Karony for his willingness to hold AMAs and engage with the community.
Binance Smart Chain Rug Pulls
Binance Smart Chain (BSC) is gaining ground as a serious competitor to DeFi on Ethereum. The promise of cheap gas fees and quicker transactions appeals to users. But its rise in prominence has been marred by several rug pulls since its inception.
People expect rug pulls to happen on Ethereum due to its decentralized status. But because anyone can launch a token on BSC, the same problem remains.
The biggest BSC rug pull to date was MeerKat Finance, in which million BUSD and 73.6k BNB, totaling approximately million, went missing in early March. The project claims it lost the funds through a hack.
Early Bitcoin Investor Sees Parallels Between Now And 2016 Bull Breakout
Bitcoin price has spent the last two years hovering around ,000 – a key resistance level that in the past has incited serious FOMO. But according to an early Bitcoin investor who has seen a thing or two, the cryptocurrency won’t hover around that price forever and sees parallels between the current price action compared the calm before the breakout into the last bull market.
Early Crypto Investor: Bitcoin Can’t Hover Around ,000 Forever
The world will know soon enough if scarcity-focused valuation methods like the stock-to-flow model continue to hold true for Bitcoin. But if they are accurate, the lowered block reward miners now receive in BTC should begin to force Bitcoin prices higher due to lower supply flow.
Natural supply and demand dynamics then begin to sway in favor of price increase, and the asset forms a bubble. And there’s no reason to think otherwise – that’s exactly what the cryptocurrency did several times now.
After the cryptocurrency’s halving in 2016, the asset spent what to crypto investors at the time felt like forever trading below 0. When Bitcoin finally took out that level and left it behind, the crypto asset never looked back.
Related Reading | Bitcoin Crossroads Made Clear By Two Remaining Lines in The Sand
Instead, it plowed right along through every next psychological resistance level imaginable, until it slammed headfirst into ,000 at peak exuberance and hype.
The same thing is happening once again, but this time at ,000. An early Bitcoin investor who experienced this for themself had dug up an old tweet to show the parallels between each market cycle and where things may potentially be at this time around.
The tweet was from almost exactly four years earlier, and if the every-four-year halving-based theories are correct, Bitcoin is about to take off just like it did last time around.
In no future does bitcoin forever hover around ,000. Long-term it’s either or 0,000K+ https://t.co/YNMd852BcJ
— Stephen Cole (@sthenc) September 11, 2020
Nothing In Between: 0,000 Plus, Or All The Way Down To Zero
The same Bitcoin investor both then and now does warn, however, that there’s no middle-ground for the cryptocurrency. It either goes on to fulfill the potential tech enthusiasts and savvy investors see as the future of money, or it fails miserably.
Stephen Cole, the early Bitcoin investors who compares 0 to ,000, back then suggested that the asset would either crash to zero, or trade at ,000 or more. Clearly he was right.
BTCUSD Weekly Log Scale and Linear Scale Zero Versus 0K Comparison | Source: TradingView
This time, he says that it is either zero, or 0,000, with no chance for in outcome somewhere in between. But which will it be? On the log scale, Bitcoin is a lot closer to 0,000 than zero, but on linear scale its a heck of a lot shorter of a distance down than up to such highs.
Related Reading | This Unique Perspective Makes It Clear Bitcoin Cycles Are Lengthening
Interestingly, there could be some reasoning behind 0 and ,000 acting so similarly as key levels dor each bear market. Why? Because its the 0.5 Fibonacci retracement level, or almost exactly 50% from the asset’s two most recent bull market peaks: ,200 and ,000.
It is not clear why markets behave this way, but there’s certainly something more to math and numbers than meets the eye. In fact, yet another important number is coming up this Sunday. Keep watch on NewsBTC for an update on what this crucial number means and why its a big deal to Bitcoin.