Tag: In Depth

Meet The Two Alleged Bitfinex Hackers: Ilya Lichtenstein and Heather Morgan

by NEWSBTC

The recovery of the stolen BTC from the 2016 Bitfinex hack was the news of the day.  That story’s protagonists, though, they’re legends in the making. You can already tell that Ilya Lichtenstein and Heather Morgan will live forever in meme form. The story is so unlikely that many people in the Bitcoin community are doubtful that it happened as reported. 

Related Reading | Bitcoin Stolen From Bitfinex Hack Moved For The First Time In Five Years

Could this tech entrepreneur and this writer/ rapper have hacked a cryptocurrency exchange? Or are they just the money launderers for a bigger operation? And, did they really save the private keys to billions in BTC on the cloud? Or were they set up? Is law enforcement playing tricks on the public or are they the heroes of the day? 

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We can’t answer those questions at the moment. What we can do is explore the Bitfinex hackers’ social media to get a sense of who they are. But first, a summary.

What’s The Bitfinex Hack All About? And, Why Is It Relevant Now?

The “Statement Of Facts” available at the justice.gov website does a good job setting the stage: 

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“In or around August 2016, a hacker breached Victim VCE’s security systems and infiltrated its infrastructure. While inside Victim VCE’s network, the hacker was able to initiate over 2,000 unauthorized BTC transactions, in which approximately 119,754 BTC was transferred from Victim VCE’s wallets4 to an outside wallet (Wallet 1CGA4s5 ). At the time of the breach, 119,754 BTC was valued at approximately $71 million. Due to the increase in the value6 of BTC since the breach, the stolen funds are valued at over $4.5 billion as of February 2022.“

That money ended up in a Bitcoin address associated with Ilya Lichtenstein and Heather Morgan, but notice that law enforcement never says they’re the Bitfinex hackers. In fact, the couple has only been charged with money laundering. But, what’s the story here? Our sister site Bitcoinist does a good job thickening the plot: 

“The suspects were arrested in Manhattan, New York. Deputy Attorney General Lisa Monaco called the arrest, one of the largest in terms of financial seizure in history.

In that sense, the government official stated that Bitcoin and cryptocurrencies are not a “safe haven” for criminals. The statement contradicts others made by public officials, such as Senator Elizabeth Warren, which have emphasized the alleged use of crypto in criminal activities. Monaco added:

“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”

Who Is Dutch Ilya Lichtenstein?

Reportedly, Ilya Lichtenstein is a tech entrepreneur and YCombinator alum. In his Twitter, he defines himself as a “Human angel investor, web3 developer, serial entrepreneur.” In his most crucial tweet, Dutch criticizes a New York Magazine article by saying, “Oh god no. So many words about posering on Twitter, almost nothing about how to secure your keys, send a transaction or get a Defi loan.”

Does that seem like the Bitfinex hacker to you? Or, more importantly, does that seem like a person who would store his private keys in the cloud? We wouldn’t know. However, the justice.org report says:

“On January 31, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to LICHTENSTEIN’s cloud storage account,8 which had been obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with corresponding private keys. Blockchain analysis confirmed that almost all of those addresses were directly linked to the hack.”

In any case, in an article titled “Rethinking the Ethereum Wallet for Mass Adoption,” in the “People are terrified of hackers and malware” section, Ilya Lichtenstein says:

Related Reading | All Altcoin Innovations Will “Ultimately Benefit Bitcoin”: Bitfinex Whale

“The biggest threat to mass adoption is without a doubt, security. It’s still way too hard to properly secure plain text private keys without making a mistake along the way. We cannot expect mainstream users to be security experts in a world where the most common password is still “123456”. Security needs to be built in to the product by design, not left up the user.”

BTCUSD price chart for 02/09/2022 - TradingView

BTC price chart for 02/09/2022 on Oanda | Source: BTC/USD on TradingView.com

Who Is Heather Morgan AKA Razzlekhan?

Reportedly, Heather Morgan is a successful copywriter who grew her own business without outside investors. On her Twitter page, she defines herself as a “Serial entrepreneur. SaaS Investor. Razzlekhan. Surrealist Artist, Rapper & Fashion Designer with synesthesia. Also Forbes writer.” 

Her most crucial tweet says: “Good guiding compass to live by: How much of a POSITIVE IMPACT does your life have on others, including society & nature?”

The reason she’s much more interesting than her husband is her rap alter ego, Razzlekhan. Her videos are not available on YouTube anymore, but you can still listen to the songs on Soundcloud. And, some Twitter users captured clips of the videos before they disappeared:

Below, there’s another track. Above, there’s a sample of the couple’s Tik Tok content:

More interesting yet, though, is Morgan’s career as a Forbes writer. In her article titled “Experts Share Tips To Protect Your Business From Cybercriminals,” the supposed Bitfinex hacker says:

“Companies that didn’t already have distributed teams or work from home policies have struggled to transition to going fully remote amidst the pandemic.

Cybercriminals and fraudsters are taking advantage of this unexpected disruption, leading to a spike in scams and cybercrime.”

Wacky music aside, does that sound like a person who would launder money through gift cards registered under her real name? We wouldn’t know, but the justice.org report says:

“Records showed that portions of the $500 gift card were then redeemed through three transactions for personal items via the Walmart iPhone application. Each of the three redemptions were conducted online under MORGAN’s name, using one of MORGAN’s email addresses, and providing MORGAN and LICHTENSTEIN’s home address for delivery.”

What Does The Twitterati Think About The Alleged Bitfinex Hackers?

Bitcoin investor Alistair Milne questions the couple’s Opsec, “Imagine being a hacker (or money launderer) and keeping the unencrypted private keys to $3.5billion of Bitcoin in an online account linked to your name.” Bitcoin security expert Jameson Lopp questions their choice of location, “Imagine sitting on $4,000,000,000 in stolen bitcoin, knowing you’re being hunted by nation states, and deciding that NYC is a smart place to hole up.”

Featured Image: The alleged Bitfinex hackers from this tweet | Charts by TradingView

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China Banned Bitcoin Mining. What Happens To Small Hydropower Stations Now?

by NEWSBTC

This China Business News report about hydropower stations will blow your mind. It contains revelation after revelation and clears the situation up. Now that Bitcoin mining is prohibited, who’s consuming that energy? How has the government decision affected private enterprises? Well, you’re not going to believe this.

It all started with this tweet by Chinese journalist Colin Wu.

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The first paragraph of that article clears up what Colin Wu’s first tweet’s all about. Namely, that in the “largest second-hand trading platform, private hydropower stations are being sold in large numbers.” Why is that? Well…

In the power industry, a hydropower station is sometimes regarded as a tireless money printing machine. But after ten years of investing in a small hydropower station in Sichuan, Zhang Huifa decided to sell the power station for more than 60 million yuan on the second-hand trading platform Xianyu.

The plants are “mainly distributed in Sichuan, Guangxi, Gansu and Yunnan.” Both Sichuan and Yunnan were Bitcoin mining hubs, according to Nic Carter’s report. The reason all of this is happening is that “the huge initial investment and long return on investment often pose huge challenges to investors.” 

Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners

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Apparently, many of the owners had to take out loans. A decade later, in order to finish paying it, they have to sell the power stations. Or at least that’s what the article tries to convey. 

Abandonment Of Electricity

According to the article, the heyday of private power plants was the beginning of the century. Investors built thousands of hydropower stations because they saw them as a constant cash cow. For their part, the regions nearby saw them as a sign of progress and a solution to their energy problems. 

However, with the gradual surplus of electricity in China in recent years, the electricity generated by hydropower stations is often faced with the fate of being abandoned (commonly known as “abandonment of electricity”)

Now, Google did most of the translations. So, maybe the phenomenon is not “commonly known as “abandonment of electricity” in other areas of the world. However, the fact remains: Bitcoin mining tends to go where there’s surplus energy available, as our sister site Bitcoinist already told you. The reason for that is simple: energy is cheaper in those areas.

BTCUSD price chart for 07/07/2021 - TradingView

BTCUSD price chart for 07/07/2021 - TradingView


BTC price chart on FTX | Source: BTC/USD on TradingView.com

Are They Selling Hydropower Stations Due To China’s Ban On Bitcoin Mining?

According to China Business News, nothing could be further from the truth:

Some people have linked this transfer behavior to the ongoing rectification of virtual currency “mining” operations. Many small hydropower stations have indeed benefited from “mining”, but the sellers contacted by the CBN reporters all stated that they had their own reasons for the sale.

To prove this, they go into the numbers. In 2011, this one plant sold all the power it generated to the State Grid. 

But in 2016, the operator built a Bitcoin “mining” plant near the power station. He rented it out to companies that came to Sichuan to “mine.”

After that, the wind shifted and the tables turned:

In 2016, the power station’s electricity revenue from the State Grid was 4.6 million yuan, and the electricity revenue from Bitcoin mining companies was 1.8 million yuan. However, by 2018 the two numbers turned into 2.7 million yuan and 4.1 million yuan respectively.

Losing all of that revenue is reason enough to sell, and that was Colin Wu’s interpretation of the situation. However, the article’s subjects offer another perspective:

Zhang Huifa said that the main reason for the sale of the small hydropower station was the difficulty of capital turnover in the real estate sector he invested in. Li Chengming said that the reason for the sale of the small hydropower station was that he did not want to continue taking care of it, even though the hydropower station produced a stable income of hundreds of thousands of yuan per year.

But, are they telling the truth?

The Human Side Of Hydropower Stations

The article does a great job selling the story. They immediately explain the psychology and the mental state of its subjects in a way that makes the reader identify with their situation:

They are all in their 50s and 60s and need to return home to look after their families. The younger generation prefers to go to big cities. No one wants to go to the deep mountains and old forests where these small hydropower stations are located.

And to top it all off

“Many small hydropower stations generally require only one employee to be guarded. Staying in that kind of place all the year round can make a person feel very lonely.” Some of them said, “You don’t know how to deal with the sound of running water every day. Someone say something!”

That sounds terrible. A question arises: What’s the article’s game? Are they trying to make sure those private hydropower stations don’t sell? Or… is this some kind of reverse psychology play?

The Revelation: They Might Be Trying To Get Rid Of These Hydropower Stations!

The article finishes with a bomb that explains everything:

According to 2020 statistics from the Sichuan Provincial Department of Water Resources, there are 5025 small hydropower stations in Sichuan. Out of those, 4774 are involved in rectification and decommissioning. It’s estimated that 1091 will be decommissioned and 3683 will be rectified. 

There’s a reason for that:

“Hydropower stations have always been one of the important factors restricting the ecology of Sichuan’s rivers.” Wang Hua, deputy director of the Sichuan Provincial Water Resources Department, said in 2020

It’s possible that the government is trying to get rid of those plants. That would explain the article’s tone, it seems like it was trying to get investors to stay away from those hydropower stations. In light of this, China’s ban on Bitcoin mining could be just a part of an even bigger play. They’re serious and methodically shaking things up over there. 

Related Reading | Pakistan to build Bitcoin mining farms in pilot program

What could be their end-game? Is China just trying to go carbon neutral and repair the original flow of the rivers? Or is there something else at play here?

Featured Image by Gary Yost on Unsplash - Charts by TradingView

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Litecoin Foundation’s Project Director Makes The Case For LTC’s Network Effect

by NEWSBTC

Old faithful Litecoin turns 10 years old on October 7th. After a decade of activity, it’s still going strong. A faster and lighter Bitcoin fork, LTC’s objective has always been to be the silver to BTC’s gold. And this crazy year of high fees, Litecoin might’ve proved its worth. For many, it became the instrument of choice for sending money around without paying an exorbitant fee.

Our sister site, Bitcoinist caught wind of this development and reported:

Data compiled by @MASTERBTCLTC shows the number of Litecoin transactions is just under 75% of that of the number of Bitcoin transactions.

“Litecoin transactions are 75% of the total bitcoin transactions.
 When will litecoin transactions flip bitcoin transactions?
 Sometime in 2021 I predict.
 227k BTC vs 168k LTC transactions.”

More significantly, @MASTERBTCLTC suggests this could be the start of an uptrend leading to a flippening in transaction count sometime this year.

We wouldn’t go that far, but it definitely is an interesting development that deserves further study. Luckily for us, Litecoin Foundation’s David Schwartz broke the case for its “network effect + ever growing status over the near past 10 years.”

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Related Reading | Grayscale Loads Up On Litecoin, Dumps BTC & Other Coins, But Why?

Litecoin’s Transactions Are Cheaper And Faster 

This is by design. The cheaper and faster transactions are the reason for Litecoin’s creation. However, the case hereby presented is that LTC “has changed from mostly a method to transfer BTC during peak cycle to one of more ‘regular’/payment” and transaction usage. The asset seems to be changing.

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The Litecoin project boasts a decade of name recognition, it shows resilience and adaptability. While no blockchain is as busy as BTC’s, the LTC blockchain is far from a ghost town. It’s bursting with activity and ready for your transactions. There’s also proven liquidity in the market. Litecoin is basically a pristine asset.  

Back to the metamorphosis, here we can see that “Transactions are well above average & growing exponentially each cycle.” Does that mean that Litecoin is becoming a payment instrument?

The “comparable growth rate in overall, new & non-zero addresses with both” ETH and BTC is an interesting statistic. And the point about the lack of headlines LTC receives is well taken.

LTCUSD price chart for 06/07/2021 - TradingView

LTCUSD price chart for 06/07/2021 - TradingView


LTC price chart on Kraken | Source: LTC/USD on TradingView.com

Is LTC Undervalued? Is This a Buying Opportunity?

Obviously, David Schwartz has a vested interest in Litecoin. However, the case he presents has merits. A ten-year-old coin with new use cases is not something we face every day. In any case, as long as you know that this isn’t financial advice of any kind, we can keep exploring the case and doing our own research.

So, Litecoin is part of many financial instruments including a Grayscale Trust. Is the price reaction to that fact lagging or non-existent? Also, there’s a halving on the horizon and the always faithful hard cap or fixed supply. Plus, as we said in the intro, the number of transactions keeps growing. 

The picture Schwartz paints sure it’s interesting. The tide may be turning for Litecoin.

The last point is pretty compelling

LTC also benefits from developments done by Bitcoin devs, requiring less full time direct devs unless necessary and less github activity.

By not trying to stand in Bitcoin’s spot and always knowing its place, Litecoin gets to benefit from all the incredible developments the Bitcoin community offers to the world. The activity around Bitcoin’s chain is second to none. Litecoin is a direct beneficiary of that. 

Related Reading | New Litecoin All Time Highs Are Still In The Cards

People used to say Litecoin was redundant but, if Schwartz is right, this classic coin might’ve found its lane. A decade later. What an inspiration. Now the question is, will the new status as a transaction asset reflect on LTC’s price? 

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Top Economist Calls Bitcoin As Legal Tender “Stupid”. Here’s why he’s wrong.

by NEWSBTC

Let’s not kid ourselves, a person like Steve Hanke has enormous incentives to defend the status quo. He’s benefited tremendously from it. It could be argued that his livelihood depends on Bitcoin failing. A project to make it legal tender in any country goes directly against Hanke’s interests, and it’s no wonder he spoke against it. The insult was over the line, though.

We´re going to take the higher road and elegantly answer all of his points. The tweet in question was this one:

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Is Bitcoin A Store Of Value?

Who decides this? The people. If one person uses an asset to safeguard his wealth, then it’s a store of value. The question then is, is Bitcoin an effective store of value? Well, considering it’s the only commodity in the history of the earth that presents absolute scarcity, it’s probably a safe bet. Make no mistake, though, it’s still a bet. The Bitcoin experiment is an ongoing process and nothing is set in stone.

Related Reading | Why Bitcoin Declared Legal Tender Could Have Major Implications Beyond El Salvador

Scratch that, one thing is set in stone. There will only ever be 21 million bitcoins. The supply is fixed, so if the demand increases, the price will go up. It’s as simple as that. To add credibility to the argument, let’s quote Saifedean Ammous’ “The Bitcoin Standard”:

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Until Bitcoin’s invention, all forms of money were unlimited in their quantity and thus imperfect in their ability to store value across time. Bitcoin’s immutable monetary supply makes it the best medium to store the value produced from the limited human time, thus making it arguably the best store of value humanity has ever invented. To put it differently, Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises.

Did you know that 40% of all US Dollars that have ever existed were printed in the last twelve months? That’s what debasement looks like. And the whole world is feeling its effects. 

Is Bitcoin A Medium Of Exchange?

Our friend Steve Hanke was answering Paraguay’s congressman Carlos Rejala but, as you probably know, the first country to approve bitcoin as legal tender was El Salvador. This is not a coincidence, since “a real village with real Bitcoin uses in daily life” is right there in El Salvador. 

The Bitcoin Beach project is also the main real-life use case for the Lightning Network. If there’s a place in which small Bitcoin transactions are an everyday thing, it’s this one. As Nasdaq informed last year, when the project was still developing:

In the flagship Bitcoin village of El Zonte, for example, you can use bitcoin to pay for a haircut, get your nails done and chow down on some local dishes (like some delicious pupusas). Soon, you’ll even be able to buy a cup of coffee with it and go to the doctor’s office for a checkup.

If there’s any doubt that Bitcoin Beach was the inspiration for El Salvador’s historic move, Stephan Livera paraphrases what President Bukele said on Clubhouse: 

So yeah, Bitcoin is a proven medium of exchange with real-life use cases. We could include the incredible amount of Bitcoin transactions that the virtual world sees every day, but there’s no need.

BTCUSD price chart for 06/09/2021 - TradingView

BTCUSD price chart for 06/09/2021 - TradingView


BTC price chart on Bitbay | Source: BTC/USD on TradingView.com

Is Bitcoin A Reliable Unit Of Account?

Let’s admit it, Bitcoin’s price is volatile. Why is that? Let’s quote “The Bitcoin Standard” once again:

As it stands, given that Bitcoin constitutes less than 1% of the global money supply, large individual transactions in Bitcoin can have a large impact on price, and small variations in demand can cause large swings in price. This, however, is a feature of the current situation where Bitcoin as a global settlement network and currency is still a tiny fraction of global settlement payments and money supply.

Bitcoin is still in its infancy. You can’t ask a 12-year-old child to behave like an adult. What does it need to grow? Nurture. And since it IS a currency, nurture is equivalent to widespread adoption. This is exactly what’s happening, with all of these countries considering emulating El Salvador in making Bitcoin legal tender. 

Related Reading | Time To Pay Attention: Bitcoin Indicator Behavior Mimics Historic Rally

If Bitcoin becomes the global reserve currency of the world, volatility won’t be a problem. And the whole planet will be a level playing field because one country won’t have the immense privilege of issuing the global reserve currency. And debasing it at will.

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What If Elon Musk Is Just Making “Noob” Crypto Mistakes?

by NEWSBTC

Is Elon Musk playing 4D chess or is he just making rookie mistakes? It’s easy to judge the unfortunate and inaccurate message those tweets contained, but, what if Elon simply doesn’t know better? What if the billionaire doesn’t have a master plan and instead is just learning right before our eyes? It’s certainly a possibility. At least that’s what TV personality and Bitcoin advocate Max Keiser thinks:

Even though Mr. Musk has been around cryptocurrencies for a long time, he’s only been into cryptocurrencies for a few months. Luckily for us, Bitcoinist is on the case from the very beginning. Let’s examine Elon’s history with blockchain-technology-related projects and try to figure out his master plan or lack thereof. It’s the least we can do.

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Could Elon Musk Be Satoshi Nakamoto?

Three years ago, the billionaire had to respond to the world:

“Not true. A friend sent me part of a BTC a few years (sic), but I don’t know where it is,” he wrote in response to a recent blog post whose author, Sahil Gupta, said Musk was “probably” Nakamoto.
 “Satoshi could be a collaboration of Musk, Nick Szabo, and Hal Finney. But it seems more likely that Elon read their research papers, took inspiration from them, and built the product solo,” Gupta had mused.

Even though back then Musk had nothing to do with cryptocurrencies, he was in the same orbit. And the crypto community tried to pull him in using various tactics.

DOGE price chart for 05/27/2021 - TradingView

DOGE price chart for 05/27/2021 - TradingView


DOGE price chart on Bitfinex | Source: DOGE/USD on TradingView.com

The CEO Of Dogecoin

Two years ago, the Dogecoin community crowned him CEO. As you might imagine, the coin registered its first Elon-pump: 

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The effect on Dogecoin was immediate and decisive: as of press time, the altcoin had made daily gains against the US dollar of almost 35 percent.

DOGE/USD currently trades around $0.0033, its highest since early November.

Elon Musk quickly gained the attention of the cryptocurrency community on Twitter, with traders extrapolating potential endorsement of the wider industry beyond DOGE.

And even though Musk immediately resigned to the Doge CEO position, the relationship between the billionaire and the joke-cryptocurrency would prove to be stronger than anyone thought.

Related Reading | Goldman Sachs Exec Says Much Nope To Firm After Making Millions On Dogecoin

Elon Musk’s Initial Views On Crypto

A year ago, the billionaire finally spoke publicly about cryptocurrencies in his own “Third Row Tesla Podcast”. Bitcoinist reported:

He likes the concept and thinks that it is ‘clever.’ However, he also has concerns regarding their role in making illegal transactions. He said,

There are transactions that are not within the balance of the law. And there are, obviously, many laws in different countries. And, normally, cash is used for these transactions. But, in order for illegal transactions to occur, cash must also be used for legal transactions. You need an illegal-to-legal bridge. That’s where crypto comes in.

Oh, the “criminals use Bitcoin” argument. The first question every noob encounters. We hope that Elon already figured out that every transaction made stays engraved in the blockchain forever. And that fact is not ideal for criminals, as the DarkSide saga proves.

Tesla Adds Bitcoin To Its Balance Sheet

A mere four months ago, Bitcoin got the Elon-pump. His company was in the process of acquiring BTC and:

Elon Musk’s addition of “#Bitcoin” to his Twitter bio and potential buying activities undoubtedly played a huge role in this rally.

The coin went from $32K to $38K, and then it was up-only for a while. A few months later, Elon answered “true” to a tweet about Bitcoin and renewable energy. Bitcoinist reported:

An April tweet that proves that Elon had been thinking about the subject. Not only that, he agreed with Jack Dorsey when he made this statement: “Bitcoin incentivizes renewable energy.” Talk about a smoking gun.

A few weeks later, Elon announced in an infamous tweet that Tesla wasn’t accepting more Bitcoin payments for environmental concerns. And all hell broke loose. 

BTC price chart for 05/27/2021 - TradingView

BTC price chart for 05/27/2021 - TradingView


BTC price chart on Gemini | Source: BTC/USD on TradingView.com

Maybe Elon Musk Has Not Done His Homework?

It’s hard to believe that Tesla invested more than a billion dollars in Bitcoin without researching the environmental part of the equation. But then again, while defending his position, Elon made clear that he doesn’t know the difference between the nodes and the miners:

While the fact that most miners were in China is not ideal, the nodes control the Bitcoin network. And those are spread all over the world. And anyone could start operating one by following a few easy steps, even you.

And then, just three weeks ago, he said the darndest thing about Dogecoin. Bitcoinist reported:

With his distinctive sense of humor, Musk finds it ironic that this nascent class, with the potential to be the world’s reserve currency, to be spearhead by a project that started as a joke. Musk said:

Which one it is going to be? Maybe it’ll be multiple, it should be considered speculation at this point. The point is that Dogecoin was invented as a joke, as essentially to make fun of cryptocurrencies. Fate loves irony, what it would be the most ironic outcome? That the currency that was invented as a joke, in fact becomes the real currency. To the moon!

That’s cute! Nevertheless, Doge fundamental characteristics make it an impossible outcome. The supply is unlimited and the system mints an absurd amount of new coins every day. If the world wants a perpetual-printing machine that devalues the holder’s coins by the minute, it already has the Fiat system. And, mind you, the perpetual printing was the main part of the joke. It seems that the punchline flew over Elon’s head.

Related Reading | Binance Burns Record $600 Million BNB In Its 15th Quarter

So, Could Elon Be Just Making Noob Mistakes? 

When a great mind accompanied by a big ego encounters Bitcoin, it immediately gravitates towards trying to fix it. Elon is not the first and will not be the last. Every great Bitcoin thinker out there had an Altcoin face. They all thought that maybe a new idea had come along that made Bitcoin obsolete. 

Eventually, they all realize that Bitcoin is more of a miracle than a technology. That the economic incentives are right where they belong, and that it’s a machine with the potential of improving the world for everyone.

Maybe Max Keiser is right and Musk just isn’t there yet. 

If that’s what’s happening, we can probably count on his genius to figure all of this out.

Let’s hope he does it sooner than later.

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Reliving The FUD That Led To This Week’s Bitcoin Crash

by NEWSBTC

It is the worst of times. It is the best of times. It is the age of fear, uncertainty, and doubt. Nevertheless, Bitcoin’s fundamentals remain intact. The project’s value is still there, despite the disastrous drop in price. It was all going so well. How did we get here? Actually, there are a lot of valid reasons. Let’s review all of the causes that lead to this FUD.

As you know, everything started through Elon Musk’s fingertips…

Tesla’s “Environmental Concerns”

When Bitcoin was on its way up, Elon’s company gave it the push it needed. Tesla announced ownership of $1.5B worth of Bitcoin that, apparently, remain on its balance sheet. The crypto community celebrated the move, profits followed. The coin’s legitimization seemed to take a step forward. And then…

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Inexplicably, Tesla announced they were discontinuing accepting BTC as a form payment. Despite wild speculation, no one knows what happened. In his tweeted announcement, Elon cited “rapidly increasing use of fossil fuels for Bitcoin mining” as the reason. Few people inside the crypto community believed it. Everyone outside of it did. And even though Tesla clarifies they didn’t sell any of their Bitcoin, the FUD set in. And retail investors started selling.

If you want to learn about Elon’s real views on the matter and about everything the crypto mining industry is doing regarding green energy, head over to Bitcoinist, our sister site.

Related Reading | Bitcoin TA: Here’s What Could Trigger A Bullish Reversal Above $40K

China’s Tightening Up Its Bitcoin Policies

This generated lots of FUD. The People’s Bank of China seemed to announce clear and unfavorable rules regarding cryptocurrencies. Yahoo Finance reports: 

“This is the latest chapter of China tightening the noose around crypto,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender.

Virtual currencies should not and cannot be used in the market because they’re not real currencies, according to a notice posted on the PBOC’s official WeChat account. Financial and payments institutions are not allowed to price products or services with virtual currency, the notice said.

Nevertheless, as with most things on this list, the announcement didn’t amount to anything specific yet. 


BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com

The US OCC Turns Its Eye To Cryptocurrencies

The newly announced Acting Comptroller of the Currency, Michael Hsu, revealed that the agency he presides, the Federal Reserve, and the FDIC are reviewing their policies on cryptocurrencies. This isn’t necessarily a bad thing, it might lead to clearer laws and stronger governmental support. Nevertheless, FUD doesn’t mind that fact. And FUD settled in. 

Hsu’s statement to the Committee Of Financial Services reads:

Shortly after I started, I requested a review of key regulatory standards and matters pending before the agency. Those items include the 2020 Community Reinvestment Act (CRA) final rule and associated NPR related to performance benchmarks, interpretative letters and guidance regarding cryptocurrencies and digital assets, and pending licensing decisions. For each, the review is considering a full range of internal and external views, the impact of changed circumstances, and a range of alternatives.

Binance Under Investigation

The US government turned its eye towards Binance. Apparently, blockchain investigator firm Chainalysis found a pattern that showed a considerably higher percentage of funds from criminal enterprises flowed through Binance, compared to other exchanges. Bitcoin Magazine reports:

The world’s largest cryptocurrency exchange, Binance, is under investigation by the U.S. Department of Justice and Internal Revenue Service (IRS), according to a report from Bloomberg.

“As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business.”

Even though it’s just an inquiry and nothing might come of it, the FUD it generated within the community cannot be ignored. 

Related Reading | Market Sentiment Hits Low As Binance Has Largest Bitcoin Inflow Ever

India almost bans cryptocurrencies

A total crypto prohibition was on the table once again, but India’s lawmakers turned the ship at the last minute. Word on the street is that they’ll pass clearer regulatory laws instead. The Economic Times reports:

The central government may form a fresh panel of experts to study the possibility of regulating cryptocurrency in India, three sources privy of the discussions told ET. This comes amid the prevailing view that the recommendations by a committee headed by former finance secretary Subhash Garg in 2019 for a blanket ban on these assets had become outdated.

This new rumor arrived yesterday, but the FUD that a total ban inspires was around for a while. 

Is This A Coordinated Attack? Or Is The World Just Going Nuts?

We can’t confirm or deny this was a coordinated attack on Bitcoin. Maybe the upper class, transnational corporations, and high rollers of all kinds want to buy your BTC at a discount. Market manipulation is as old as markets. But, maybe, this perfect storm of bad news is what happens when the best performing asset that the world has ever seen takes over the world’s headlines. All eyes turn to it, and all fingers start poking.

However…

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