BlockWolf writes a crypto weekly news recap. Here is the recap for what we thought were the biggest stories of the week. You can also find our youtube video for this topic at .
Reddit may reintroduce crypto (May 2nd)
Reddit removed Bitcoin payments for Reddit Gold in March because of technical updates and high transaction fees but the Reddit CTO said that he thinks crypto payments will come back. The CTO also mentioned that they may include other coins like Ethereum and Litecoin.
Takeaway: Reddit is most likely the largest community for cryptocurrencies so it is ironic that Reddit itself does not accept cryptocurrencies as payment. Reddit re-adopting cryptocurrencies is a good sign for cryptocurrencies and would provide a respectable example of how one could use a coin like Bitcoin. If Reddit were to include Ethereum and Litecoin in addition to Bitcoin, Reddit should not have to worry as much about users paying transaction fees because the fees to use Ethereum and Litecoin are less than Bitcoin.
Goldman Bitcoin futures trading (May 3rd)
Goldman Sachs will open trades for Bitcoin futures. Those trades reflect the price of Bitcoin but not Bitcoin itself. Goldman Sachs does not have a public launch date of its new operation.
Takeaway: Trading futures contracts is not the same as trading the actual asset. Nonetheless, more trading options for cryptocurrencies adds legitimacy to their image and should help mature their market.
SEC and CFTC meet about if Ethereum a security (May 7th)
There were rumors that the SEC and CFTC were going to discuss whether Ethereum should be classified as a security on May 7th, but a public meeting never occurred. Perhaps a private meeting took place, but there was no public statement about Ethereum’s classification.
Takeaway: Always be cautious when relying on secondary sources however hard that may be. The story demonstrates the power of mob mentality and how something may seem true if enough people believe it. Especially when it comes to a speculative industry like cryptocurrencies, try to find primary sources when conducting research.
NYSE to open bitcoin exchange? (May 7th)
According to the NY Times, “The parent company of the New York Stock Exchange has been working on an online trading platform that would allow large investors to buy and hold Bitcoin, according to emails and documents viewed by The New York Times and four people briefed on the effort who asked to remain anonymous because the plans were still confidential”
Takeaway: A Bitcoin exchange supported by the Intercontinental Exchange would presumably significantly increase volume for Bitcoin and perhaps demand for Bitcoin. That exchange would presumably instill more consumer confidence in Bitcoin and maybe remove some negative preconceptions about buying Bitcoin.
Buffet, Gates, and Munger talk Bitcoin (May 7th)
Three prominent investors mentioned Bitcoin. They generally spoke negatively about Bitcoin. Some of their words can be heard here. In summary, the three of them stated the following: Munger said that Bitcoin is useless artificial gold. Buffet said that Bitcoin is an asset that creates nothing. Gates said that Bitcoin isn’t producing anything and that you should not expect it to go up – it is a pure greater fool theory investment.
Takeaway: Buffet and Gates are correct but they fail to mention some specific Bitcoin use cases that may prove that even though they do not “create anything” – like revenues, they could still have value. For instance, a Bitcoin transaction could offer a competitively quick and cheap way of transferring money internationally. Although Bitcoin may not have intrinsic value that produces revenues/profits, it still has a use case, and therefor has some value. Equating that value is difficult, and Gates is right that in the end, Bitcoin is a greater fool’s game, but he seems to dismiss that Bitcoin has any value.
Ethereum Casper code release (May 8th)
Ethereum released its first release of its code for Casper, its Proof of Stake consensus mechanism.
Takeaway: Proof of Stake is a mechanism that could potentially secure blockchains in a scalable format without the expense of excessive electricity used in Proof of Work. Ethereum’s initial code release for Casper shows that Ethereum is one step closer at achieving a more scalable blockchain solution.
Florida is now live on Robinhood (May 8th)
Robinhood announced that it was opening cryptocurrency trading for Floridian residents on May 8th.
Takeaway: Robinhood is slowly becoming more accessible for registered American traders. When Robinhood fully opens trading, there will be more exposure to cryptocurrencies, resulting in more volume and possibly demand for cryptocurrencies.
Bytecoin (BCN) massive arbitrage (May 8th)
Bytecoin (BCN) was listed on Binance on May 8th. When it was listed, the Bytecoin network experienced issues due to increased volume and block production was delayed. Meanwhile, prices on Binance were trading at an extreme multiple compared to other exchanges, and users were having a hard time depositing and withdrawing Bytecoin because of its network issues. Some people blamed Binance and some people blamed Bytecoin developers for a coordinated plan to artificially raise Bytecoin prices but there has been no official evidence to suggest that either organization coordinated any malicious activity other than speculative coincidences. Users that were able to move their Bytecoin to Binance and sell at a higher price on Binance compared to other exchanges were able to profit off the price discrepancy between the exchanges.
Takeaway: Although it is fair to have some expectations from an exchange and a development team, users need to take caution when trading cryptocurrencies on exchanges. Cryptocurrencies are especially volatile when they are added to new exchanges, so if being caught on the wrong side of a of a potential arbitrage opportunity or opportunities sometimes described as a “pumps and dumps”, avoid trading coins that are about to be listed on major exchanges.