When the Music Stops: Price Support and Liquidity After the Token Sale Ends

Despite the expanding interest in cryptocurrencies, the truth is that most altcoins are failing. While some fall victim to poorly designed business plans and/or faulty adoption strategies, many altcoins are the product of outright scams. One thing they all have in common, however, is their attempt to emulate the success of Bitcoin. Very few altcoins have managed to ignite the kind of interest that propels a cryptocurrency from a mere novelty to something that captures the attention of industry giants and world leaders.

What’s so Great About Bitcoin Anyway?

2017 has been a banner year for Bitcoin. In December alone, the digital currency posted gains of more than 65%, starting the month trading at just under $10,000 and – after a brief spike into the $18,000 range – settling into the $16,000 – $16,500 range at press time. Overall YTD gains for Bitcoin, which started out the year at around $960.00, are even more impressive at over 1600%.

What makes the recent price hikes in Bitcoin not only feasible, but sustainable as well, is the tidal wave of buying demand being realized with a limited and finite supply of bitcoins, as cryptocurrencies, a digital asset, entering the mainstream. This tidal wave has investors looking to diversify into other currencies in the hopes of getting in early on the “next” Bitcoin. Unfortunately, with the crypto-space glutted as it is with so many altcoins, it isn’t always easy to separate the coins with real potential from those with a slick marketing campaign but which tend to fizzle once they get listed on exchanges.

Why So Many Altcoins Fail

Why So Many Altcoins Fail

Where cryptocurrencies as a whole currently fall short is in institutional support. Consider the mainstream financial sector for a moment. With conventional offerings like IPOs (Initial Public Offerings), once a company’s shares are listed on a stock exchange, they are usually supported by “market makers”.

In fact, many exchanges – including the New York Stock Exchange and Nasdaq – require that each IPO have at least 3 or 4 market makers. The purpose of a market maker is to buy and sell shares of a company’s stock throughout the day to stimulate trading of that stock. Goldman Sachs, Morgan Stanley, and JP Morgan Chase are all examples of market makers.

In a peer to peer decentralized system, there is no equivalent support mechanism. As a result, most ICOs wither upon listing because nobody is actually focused on price support or stability.

How One ICO is Doing it Right

How One ICO is Doing it Right

So how can a company offer price support and stability to a coin post-ICO without a conventional market maker in a peer to peer decentralized system?

They can take a page from 4NEW‘s playbook. 4NEW is a blockchain-based Waste to Energy platform whose entire business model is reverse engineered for aftermarket price stability and liquidity in its coin, without the need for market makers. They have already successfully raised more than $30 Million in institutional funding through conventional means to build a Waste to Energy plant and have recently launched their crowdsale where they are seeking to raise $9.5 million. There are currently just 2 days remaining until the end of their ICO.

The Waste to Energy plant that 4NEW will be building not only solves two important social and environmental concerns, those of waste surplus and energy shortfall, it also ensures widespread adoption of FRNCoin (4NEW’s cryptocurrency).

Once completed, all sales generated from the Waste to Energy plant will take place on the 4NEW blockchain with the ability to make and accept timed payments between businesses. Additionally, because adoption of FRNCoin is already being established well in advance of the launch of the first plant, a strong foundation of demand is being “baked” into the coin, offering pricing stability and consistent liquidity.

Beginning in 2018, FRNCoin is set to be accepted by a growing network of businesses in the Healthcare, Pharmaceuticals, Health Insurance, Telecommunications, Credit Card processing, and Money Transfer Services industries. New businesses and industries are expected to be added continuously throughout the year. When consumers purchase the FRNCoin to avail the goods and services offered by these businesses, an organic demand will be generated in the coin that is focused on utility and not on speculative trading. This organic demand will bring new liquidity into the marketplace for the coin, offering price support.

As a result, there will always be consumers making a market for the coin, replacing the market making function offered by institutions. Since conventional institutional support is not suited for a peer to peer decentralized system, there needs to be the kind of peer to peer market making – like that of 4NEW – that supports the coin’s price without engaging in speculative trading.

As 4NEW continues to add more business consumers to its coin, a Top-Down approach to widespread adoption and utilization will begin. This will permeate through to the masses over time, leading to another successful cryptocurrency very similar to Bitcoin. In fact, the only real difference between Bitcoin and 4NEW is their adoption approach.

Bitcoin experienced a Bottom-UP path to adoption where, by virtue of the people (the crypto community) adopting the coin, businesses found themselves having to adopt it as well in order to stay competitive. This methodology takes longer, however, it has also given the community an awareness and wider acceptance of cryptocurrency today.

Like Bitcoin, 4NEW will act like a store of value over time, however, it utilizes the Top-Down approach to adoption. A market for the adoption of its FRNCoin is already being established across several industries so that, at the conclusion of the ICO, token holders will be able to use the coin as a means of payment. The credibility of this offering is further cemented by the company’s recent affiliation with the Imperial College of London, a 110-year old academic institution with a pedigree track record.

Nobody can guarantee the future performance of any token or ICO project, of course, but 4NEW appears to show all the signs of becoming a lasting example for future success stories within the cryptocurrency community.

What do you think of 4NEW’s market making strategy? Would a similar system help shore up and stabilize other cryptocurrencies? Let us know in the comments below.

Images and media courtesy of 4NEW, AdobeStock

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Venezuela Now Requires Bitcoin Miners to Register with the Government

Bitcoin mining has exploded in Venezuela due to the country’s massive hyperinflation. Now the Venezuelan government is requiring bitcoin miners to join an online registry.

It seems that the misery of the Venezuelan people knows no end. The South American country’s economy has been hammered by massive hyperinflation due to the policies of the authoritarian government, now headed by President Nicolas Maduro. Many people, both poor and rich, have turned to mining Bitcoin in order to survive. Now a further clampdown is coming as the Venezuelan government is requiring bitcoin miners to join an online registry.

Starving Venezuelans turn to Bitcoin

Sign Up … Or Else

The announcement of the new registry was made at a recent press conference by Carlos Vargas, the newly appointed “superintendent of Venezuelan cryptocurrency.” Bitcoin miners will have to start registering with the government on December 22nd when the online registry goes live.

Of the information that the government is looking for, Vargas says:

We want to know who they are, we want to know where they are, we want to know what equipment they are using.

Those in favor of the registry say that it will offer legal protections to bitcoin miners. Currently, the government has been cracking down on miners, such as the recent police raid on December 9th that saw the confiscation of 21 mining computers and the arrest of their 31-year-old owner. The police have charged the bitcoin miner with exchange fraud, computer crimes, damage to the national electric system, financing terrorism, and money laundering. (I’m surprised they didn’t throw in jaywalking while they were at it.)

Just How Expensive is Bitcoin Mining?

What Could Go Wrong?

The people of Venezuela have been hammered by the socialist economic policies of the country’s last few administrations. Basic necessities, such as food and medical supplies, are non-existent, and inflation has reached over 4000% this year. Such circumstances have forced people to turn to Bitcoin in order to get the items they need to actually survive, and the situation is not getting any better. Weekly bitcoin trading in Venezuela has skyrocketed from $225,000 early in the year to a staggering $2.1 million in the first week of December.

As soon as the people turned to bitcoin mining, extortion and theft by the authorities have happened. Many individuals have had their mining rigs confiscated by police and federal authorities, only to have those authorities use the machines to mine bitcoins for themselves. One miner recently gave up 11 of his 20 machines in lieu of a $20,000 bribe, and insult has been added to injury as the officials who stole his machines now contact him for technical advice.

So, what could go wrong with an online registry for bitcoin miners? The most obvious is that the government will be able to do a mass confiscation once a full list has been compiled. The government of Venezuela has nationalized (forcibly taken over) hundreds of businesses, which has led to the vast majority of them failing.

Starving Venezuelans Turn to Bitcoin Mining in Desperation

As David Fernando Lopez Torres, who moved his mining farm from Venezuela to San Francisco, notes:

If I were still in Venezuela, there’s no way I would sign up. If they weren’t protecting miners’ rights without a registry, how can they trust that they would protect their rights with a registry? First they need to publicize what the registry will be used for, because we can’t trust their intentions.

The likely result of the new online registry is that the majority of bitcoin miners will move even further underground. You would have to be stark-raving mad to believe that a corrupt government will honor any agreement to allow bitcoin miners to legally operate in peace. Either new taxes will be imposed upon the miners or the government will outright confiscate the equipment. Either way, the government will take the bounty of bitcoin mining for themselves.

A dictatorial president, a national government who has seized hundreds of legal businesses, economic policies that have ravaged the country, and massive corruption all point to a really bad outcome for those who sign up for the registry. But at least Venezuela will have the Petro, their own national cryptocurrency!

What do you think about the compulsory registry for bitcoin miners in Venezuela? Would you sign up? Let us know your thoughts in the comments below.

Images courtesy of Pixabay and Bitcoinist archives.

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Millennials Driving Crypto Momentum in 2018

There have been a number of driving forces behind the Bitcoin boom of 2017. These include core improvements, hard forks, and recognition by institutional exchanges such as CBOE, CME, and Nasdaq. The more mainstream it becomes the bigger the FOMO (fear of missing out), and those driving the momentum in 2018 will be millennials.

According to a report in the Independent, one in three millennials will be investing in cryptocurrencies by the end of next year. Millennials are defined by demographers and researchers as those born between the early 1980s to just after 2000. This generation grew up with technology so cryptocurrencies will be right up their alley.

Youth Gone Wild

Research by London based crypto exchange London Block Exchange revealed that 5% of those aged below 35 already have money invested in cryptocurrencies and a further 11% are planning to invest next year.  The younger generation is signaling a shift from traditional investments such as stocks, bonds, mutual funds or even real estate. The study went on to reveal that a further 17% would seriously consider investing in cryptocurrencies by the end of 2018.

With UK property prices escalating beyond the reach of many and the government repeatedly increasing the retirement age, pensions and property are no longer viewed as attractive investments. LBX Founder and CEO Benjamin Dives stated:

“This study underlines the gulf between the younger generation’s view of money and that of their parents and grandparents, who had assets perform so well for them in pensions or property. Millennials clearly feel left behind by the old system and are looking at cryptocurrencies as a new dawn,”

If this does happen it will make cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, plus their siblings, a more popular investment asset among this generation than shares, bonds, commodities or a second property. The study revealed that 24% of those surveyed regretted not buying into cryptocurrencies earlier after seeing their values soar throughout 2017.

Youth Gone Wild

Crypto What?

Unsurprisingly 57% of those aged over 55 said that they are not interested in investing in cryptocurrencies. Without some technical knowledge and inclinations, it can be a steep learning curve that the majority of the older generation simply does not want to climb.

Cryptocurrency expert at the University of Cambridge, Garrick Hileman, stated that banks and traditional financial institutions have struggled to reach out to millennials:

“Millennials began their income generating years during the fallout from the 2008 financial crisis, and many don’t completely trust traditional financial services firms or the system in which they operate,”

More investment next year means only one thing for crypto and that is good news for anyone that has got in this year.

Will you be investing in cryptocurrencies in 2018? Let us know in the comments section below.

Images courtesy of Shutterstock

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More Altcoins Coming to Coinbase Says CEO Brian Armstrong

Coinbase has come under fire in recent weeks for slow transaction times, nonexistent support, and multiple server outages under high traffic. The US-based exchange even suspended trading when things really got lively during Litecoin’s romp to the top a few days ago. However new things could be coming to Coinbase in 2018.

In an interview with CNBC, Coinbase CEO and co-founder, Brian Armstrong, discussed how Bitcoin and other cryptocurrencies are becoming the next generation stock market. He first went into brief details on a new service which will allow traditional investors and institutions to buy and store cryptocurrencies securely:

Coinbase Custody is seeking to become the first qualified custodian for institutions that are looking to store digital currency.

Altcoin Additions

The interesting part came next when he started talking about altcoins. As the crypto market becomes “Stock Market 2.0” he said that Coinbase plans to expand its altcoin listings in 2018.

The ones that are the most exciting to us that we have on the platform today are bitcoin, ethereum and litecoin, but there’s many more that are going to be added to the platform in 2018 and I think this is going to be a really exciting space for all kinds of institutional investors to make money.

When questioned about SEC regulations, he said that they have stayed out of adding any ICOs on the platform to date because of that regulatory uncertainty. There is a cautious approach to the area and a number of factors are considered before they add a new asset to the platform. These include regulatory risk, diligence on the team, security audits on the coin, and the customer demand. Finally, Armstrong added that Coinbase is looking to provide a safe place where customers can have assets that they trust and participate in this market.

Pick Your Poison

Speculation is all that we currently have on what particular altcoins will be added to Coinbase. It is likely they will come from the top of the market capacity charts, which tend to be the most popular coins by demand. So in 2018 will we be seeing Ripple, NEO, IOTA, and Bitcoin Cash listed on Coinbase – or will they be selecting Dash, Monero, Nem, and Bitcoin Gold – or maybe all of the above?

Give us your thoughts on what may be coming to Coinbase in the comments below.

Images courtesy of CNBC, Coinbase via Glassdoor

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NAGA Token Sale is Nearly Over! 2 Days Left Before the End of the Token Sale!

The token sale of the German FinTech company, The NAGA Group AG, comes to its end with more than 39,500 backers and 28.5 million NGC raised. Only 2 days left before the end of the Token Sale and NAGA is super close to reaching their goal of 30 million NGC sold. So, hurry up in order not to miss out and become a part of the NAGA Ecosystem.

The NAGA Token Sale is LIVE and Only Two Days Left Before Its End

The NAGA main Token Sale is LIVE with more than 39,500 backers and 25,900,000 USD collected so far. Click here to read more about the Hard Cap and the Token Sale itself. Moreover, NAGA is proud to have more than 10,000 Telegram active members in their official chat.

The exchange rate for NAGA Coin is 1 NGC = $1 USD. Investors can purchase tokens using BTC, BCH, ETH, LTC, and DASH. For those wishing to use FIAT currency, EUR and USD are also accepted.

  • Token Name: NAGA Coin
  • Ticker Symbol: NGC
  • Token Price: 1 NGC = $1.00
  • Cap in Tokens: 1 million NGC
  • Token Sale Goal: 30 million NGC
  • Minimum Purchase: 10 NGC
  • Maximum Purchase: 10 million NGC
  • Accepted Currencies: BTC, BCH, ETH, LTC, DASH, EUR, USD
  • NGC is announced to be listed and tradable on HitBTC Exchange by the end of December 2017
  • End Date: December 15, 2017 (23:59 CET)

Investments and trading are ruled and governed by greedy banks and corporations that control access, operate non-transparently and always take a cut of your money. At NAGA we are about to change that. By introducing the NAGA COIN, we are on a mission to revolutionize the outdated banking sector. The financial markets are about to change, and we embrace that.

– The NAGA Group AG

About The NAGA Group

The NAGA Group is a publicly listed, EU-regulated German Fintech company with trading platforms for financial markets and virtual goods. They have a market cap of more than 200 million Euros, millions in reported revenues, and over $4 billion in trading volume every month. After one of Germany’s fastest IPOs in the last fifteen years, The NAGA Group was listed on the Frankfurt Stock Exchange on July 10, 2017. Since then, the company’s share price has gone up by nearly 500%.

The NAGA Group is a management-owned growth-driven international FinTech with an accomplished team of more than 120 people. The company holds various EU financial licenses, including an asset management license, and is backed by one of China’s largest private investment conglomerates, FOSUN. They are further supported and backed by widely known investors, institutions, and advisors, including Hauck & Aufhäuser, one of the oldest private banks in Germany.

For more information about The NAGA Group AG and their Token Sale please visit their website and join Telegram https://t.me/NAGAico to stay in touch.

Images courtesy of The NAGA Group

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U.S. Federal Reserve Chair Janet Yellen Downplays Bitcoin

U.S. Federal Reserve Chair Janet Yellen finally revealed her thoughts about Bitcoin. She thinks that the digital currency’s potential risk is limited. Therefore, Bitcoin is incapable of affecting financial markets. Yellen made her comments during her final press conference, on December 13, 2017.

U.S. Federal Reserve Does Not Regulate Bitcoin

Janet Yellen, throughout her tenure as Federal Reserve Chair, had not made many references about the cryptocurrency. However, now that she is about to leave her position, in her last press conference, while announcing an increase in U.S. interest rates, she surprisingly mentioned Bitcoin.

Specifically, Yellen referred to Bitcoin as a “highly speculative asset,” and that “it does not constitute legal tender.” Moreover, she indicated that the cryptocurrency is “not a stable store of value.”

In this regard, she concurs with her colleague New York Fed President William Dudley who also doubts that Bitcoin is a good store of value. According to Bloomberg, last month, Dudley expressed his skepticism about Bitcoin, saying “I would be, at this point, pretty skeptical of bitcoin. I think it’s really more of a speculative activity.”

However, the good news is that Yellen does not seem to view the cryptocurrency as an imminent threat to the U.S. financial system. She declared:

Bitcoin at this time plays a very small role in the payment system.

Central Bankers Are Still Skeptical About Cryptocurrencies

Central Bankers Are Still Skeptical About Bitcoin

Yellen’s tenure as Fed Chair ends in February 2018. Her comments about the cryptocurrency do not differ from those expressed by her peers.

For example, the Governor of the Reserve Bank of Australia Governor Philip Lowe, referring to Bitcoin’s current “fascination,” said that it “feels more like speculative mania than it has to do with their use” as a form of payment.

Similarly, the European Central Bank chief Mario Draghi also considers that cryptocurrencies are immature. As CNBC reported, Draghi said:

Cryptocurrencies are not ‘mature’ enough to be considered by the European Central Bank (ECB) for regulation.

A few days ago, Former Chairman of the U.S. Federal Reserve Alan Greenspan also dismissed the digital currency. Greenspan said, “Bitcoin is not rational,” and compared it with a fiat currency that the U.S. Continental Congress minted in 1775 to finance the American revolutionary war effort.

Bitcoin and its blockchain technology are a threat to the three-thousand-year-old monetary system and the unfair, obsolete banking system. Understandably, their representatives scorn or downplay cryptocurrencies. And most likely, they will never change their minds. Nevertheless, with a growth of over 1,700 percent in one year, Bitcoin and other cryptocurrencies will continue to grow and eventually challenge the current fiat monetary system.

Do you think that Federal Reserve Chair Janet Yellen’s departure will have an effect on Bitcoin? Let us know in the comments below.

Images courtesy of Reuters/Jonathan Ernst, Wikimedia Commons, Pixabay

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