Day: August 5, 2017

The sudden and massive run up on Bitcoin Saturday pushed the market cap for the cryptocurrency above $50 bln for the first time ever, leaving investors thrilled.

It appears as if we may finally have a somewhat exciting weekend for cryptocurrency. More often than not, weekends are dreadful for trading and price changes. This weekend may prove to be quite different, as Bitcoin has reached a new all-time high earlier this morning. Other currencies are also moving up, with the exception of Bitcoin Cash. An interesting turn of events, that much is evident.

Bitcoin’s New All-time High Is Glorious

For quite some time now, cryptocurrency speculators have been wondering when BTC would hit the US$3,000 mark again. Even though BTC has hit that point once before, it didn’t last all that long. In fact, the price dropped to well below US$2,800 in the next few days and things have not improved much ever since. That was, until earlier today, as one Bitcoin now traded at the price of US$3,155. A significant gain, although maintaining this new price will be a massive challenge, to say the least.

That being said, it is good to see BTC finally breach the US$3,000 mark once again. Thanks to a mounting trading volume and some positive market trends despite the launch of Bitcoin Cash, things are falling into place. It is also the first time Bitcoin’s market cap surpasses the US$52bn mark. That in itself is a major development in its own right, which goes to show a bright future may be ahead for cryptocurrency as a whole.

There is no real indication for this sudden price moment, though, other than stating how it was long overdue. Then again, there is no guarantee the Bitcoin price will remain above US$3, 000 for a long time, as only time will tell what will happen moving forward. There is no reason to push the Bitcoin price down again either, but markets have a funny way of working themselves out at times. It is certainly possible the uptrend will continue, but there are no guarantees whatsoever.

No one will be surprised to hear Bithumb is generating the highest amount of trading volume right now. That is quite intriguing, considering the exchange is also quite bullish on Bitcoin Cash right now. Moreover, the Bitcoin price on Bithumb is a lot lower compared to other exchanges, with the gap hovering around US$50 right now. It will be intriguing to see if this situation corrects itself over the weekend, though. We are used to seeing a higher cryptocurrency price in Korea, not a lower one.

Fiat currencies are definitely dominating the Bitcoin trading market right now. The top 6 trading pairs are denominated in Korean Won, US Dollar, Chinese Yuan, and Japanese Yen. The Euro market is, as we have gotten accustomed to, well behind in this regard, yet that price seems to be following the upward trend for the time being. All of this seemingly indicates the current Bitcoin price push originates from Asia once again, which has been the case on multiple occasions in the past.

Speaking of Bitcoin Cash earlier, it is the only top 10 cryptocurrency to lose value right now. That is not entirely surprising, as many people still don’t see the benefit of this currency. Interestingly enough, we now have the first merchant to accept BCH payments. GPUShack, the company behind EthOS and a few other projects, is accepting Bitcoin Cash payments. A bold decision, given the current volatile price, but a step in the right direction for all BCH supporters.

The Nasdaq Composite has recently filed an application with the patent office for a computer system able to release time-sensitive information to investors securely using Blockchain technology.

One company is seeking to build a peer-to-peer Blockchain system designed to allow electric vehicle drivers to share and receive payment for their charging stations during off hours.

What’s the price of Bitcoin Cash? Days after the new cryptocurrency was created, there are more questions than answers about its market.

Bitcoin exchange Bitfinex announced on Friday that it has started allowing Bitcoin Cash deposits and withdrawals. However, some customers were upset when they learned that the exchange credited their accounts with approximately 0.85 BCH per bitcoin instead of using the typical 1:1 ratio.

Also read: Coinbase Reverses – Plans to Allow Bitcoin Cash Withdrawals in January 2018

Deposits and Withdrawals Enabled

Bitfinex announced on Friday that the platform has started allowing deposits and withdrawals of Bitcoin Cash (BCH), the new cryptocurrency which resulted from the August 1 Bitcoin network split.

The announcement came the day after the exchange started BCH margin trading and had recently completed crediting its customers with approximately 0.85 BCH per bitcoin held at the time of the fork.

Customers Shortchanged

Bitfinex explained that its distribution methodology took into account margin positions which led to a deficit in BCH to pay customers with. Specifically, “margin longs in BTC/USD and margin shorts in XXX/BTC” did not receive BCH and “margin shorts in BTC/USD and margin longs in XXX/BTC” did not pay BCH. Meanwhile, customers holding bitcoin and bitcoin lenders at the time of the fork received BCH. Bitfinex declared:

We will be resolving this discrepancy in the form of a socialized distribution coefficient.

The exchange subsequently detailed that its methodology has yielded the distribution coefficient of 0.7757, so customers would only get 0.7757 BCH per bitcoin.

Not First Customer Loss Socialization

This is not the first time Bitfinex has used the tactic of spreading the losses among its customers. One year ago, the exchange announced its plans to use the same tactic of distributed loss allocation in the wake of its April 2016 hack and theft of 119,756 bitcoins.

Bitfinex said at the time that it would initiate “a socialized loss scenario among bitcoin balances and active loans to BTCUSD positions.” It then promptly issued digital IOUs to its customers that allowed both the trading and redemption of their missing bitcoins at a later date.

Despite many early complaints from its customers, the tactic worked for Bitfinex to avoid bankruptcy. In April, the company announced that it had successfully paid back all customers.

Unlike the plan formulated a year ago, however, the exchange’s BCH distribution policy does not offer an IOU to customers for their missing 15%.

Large-Scale Manipulations

The exchange claims that following its methodology announcement on July 27, “several accounts began large-scale manipulation tactics” such as wash trading and self-funding shorts. These actions were “an attempt to obtain BCH tokens at the expense of exchange longs and lenders on the platform,” the exchange described, adding that it has sanctioned the manipulators for violation of its terms of service.

These manipulations caused the BCH distribution coefficient to plummet, Bitfinex explained, and said that they then decided to adjust the coefficient to “disallow any hedged BTC balances in excess of any such hedged balances that may have existed at the time of the July 27th distribution announcement.” In the end, the coefficient was increased to roughly 0.85 BCH per bitcoin. The exchange noted:

This adjustment increases the distribution coefficient from 0.7757 to 0.8539.

Distribution Unfair?

Customers who were not margin trading on Bitfinex recently were particularly unhappy with receiving 15% less BCH compared to most other exchanges which offer a 1:1 ratio.

One user tweeted, “[I] joined Bitfinex to split my bitcoins to BTC + BCH. Didn’t borrow, go long or short. Got 15% stolen by the exchange.” Another user concurred, “same here, it’s totally thief. We don’t play margin, or have any responsibilities for Bitfinex’s lost, we have no reason to pay 15% 4 that.” Another tweet directed at the exchange noted:

Thanks for your solid platform, however lots of users are angry about your distribution policy which is considered unfair, 0.85!

However, Bitfinex maintained its stance that “the intent of the BCH distribution mechanism was to protect lenders who were already locked into loans at the time of the announcement and to avoid distributing negative balances to shorts on an uncertain value of an unproven digital asset.”

What do you think of Bitfinex’s approach to distributing BCH to its customers? Let us know in the comments section below.

Images courtesy of Shutterstock, Bitfinex, Twitter

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The post Bitfinex Enables Bitcoin Cash Deposits and Withdrawals but Credits 15% Less appeared first on Bitcoin News.

Bitcoin price explodes past the $3,000 mark.

It is a well-known fact Korean cryptocurrency exchanges value most cryptocurrencies a lot higher compared to their Western counterparts. This has been the case for nearly every cryptocurrency in the world, including Bitcoin, Ethereum, and Litecoin, to name a few. It now appears the same is happening to Bitcoin Cash, as Bithumb opened trading of BCH overnight. Right now, one token is valued at US$577, which is almost double that of the Western exchanges.

Korean Exchanges See Merit in Bitcoin Cash

It is always interesting to see how exchanges all over the world value the same cryptocurrencies differently. Over in Asia, paying a premium price compared to Western markets has become the new normal in recent years. That is somewhat surprising, though, but it is acceptable in that part of the world. In most cases, trades pay a premium of 5% on top of the global market average for that particular cryptocurrency.

Things are a bit different as far as Bitcoin Cash is concerned, though. Bithumb is one of Korea’s largest exchanges, and they finally enabled the trading of BCH against the Korean Won. It does not appear there is a BCH/BTC trading pair on the exchange right now, although that situation may come to change in the near future. So far, the market is generating a nice amount of trading volume and the BCH price isn’t tanking like it is in the Western world.

More specifically, Bitcoin Cash is valued at US$579.4 on the Bithumb exchange at the time of writing. Taken an average premium of 5% into account, that means the price in the rest of the world should be close to US$551. That Is anything but the case, though, as exchanges such as Bittrex are effectively driving the price down quite hard  In fact, the price hovers around US$248.88 right now across Western exchanges, which is shockingly low compared to Bithumb.

Explaining such a large price discrepancy is not easy. It does not appear Bithumb allows for BCH deposits and withdrawals right now, which is not entirely uncommon across exchanges these days. After all, most platforms have taken that stance, with Bittrex being one of the few exceptions. Assuming this volume on  Bithumb are only the tokens issued to existing users without external deposits coming in, the current price can be justified easily. We saw the same scenario unfold on Bittrex, where the price hit over US$1,100 at one point. That didn’t last all that long, though.

For the people looking to try and take advantage of this arbitrage opportunity, that will not be all that easy. Unless you have access to a Korean bank account or passport, you will face a fair few limitations regarding deposits and withdrawals. Moreover, without knowing if Bithumb effectively allows BCH deposits, there is very little reason in signing up for this platform anyway. Until deposits are allowed, no one can take advantage of any opportunity whatsoever, unfortunately. It is still a rather interesting development, to say the least.

It is certainly possible the success of Bitcoin Cash may hinge on support from Asian enthusiasts and miners. So far, it seems the mining community has little to no interest in this project. However, if the prices across Asian exchanges remain relatively high, that situation may come to change sooner or later. Bithumb is currently pushing for a very high BCH price, which is more than double the market average in the West. Something will have to give in order to bridge this gap. It will be interesting to see how this situation evolves.

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