Market report


London Block Exchange

31st January 2017

Bitcoin bears are winning this battle — so let’s look at the whole war.


Bitcoin bears are winning this battle — so let’s look at the whole war.

Let’s not focus on NEO, which is down 15% in the past 24 hours — after all, there’s some meaning behind the old adage ‘buy the rumour, sell the news’. We also won’t look at Lisk, Revain, Populous, Cindicator or Sirin Labs — the only major projects in the green today.

In fact, we won’t even go into the other 95 top cryptoassets by market cap that are 12% down on average since yesterday. We will, however, remember that the entire crypto market is at the same price level as it was on December 14th, January 17th and January 22nd.

Most importantly, we won’t forget that it can go further down. It’s useless to try to call the bottom as every drop could be a ‘falling knife’. Even ‘Parabolic Trav’, a famous Twitter trader, just made a fool of himself by insulting one of the most respected bulls in the space.

Ari Paul, co-founder and CIO of BlockTower Capital, is that bull. He bought £700k worth of options that bitcoin will hit £35k ($50k) by the end of 2018 and he also envisioned that bitcoin ‘will trade at both £4k ($6k) and £40k ($60k) at some point in 2018’!

So, before we move on to understand what’s happening, always remember that if you are an investor in this space, your priority should always be risk management. Taking profits after major bull runs is a wise thing to do — but don’t trade in a panic!


Today’s information is not new — so don’t follow the herd.

We started talking about the potential role of Tether in the artificial inflation of cryptoasset prices on January 19th, warned about the controversy USDT is facing on January 22nd, and last Friday highlighted ‘The Tether Report’.

Let’s recap. Tether is a stable coin. A cryptoasset designed to mimic the price of a fiat currency for one of the key reasons we like fiat currency — stability. For traders, it’s mostly used to move ‘dollar value’ between exchanges. This is particularly applicable to exchanges that don’t accept fiat deposits, like Binance and Bittrex.

Tether created USDT to follow the dollar price and promised to only issue a USDT when it was backed by a real dollar deposited in its bank — this is when the problem started. In a community famously suspicious of banks, people started to investigate, including the popular anonymous reporter behind Twitter’s Bitfinex’ed account — named as such due to the relationship between Tether and Bitfinex.

After the Panama Papers came out, it was found that the major exchange shared operators with Tether and theories started to arise about how USDT was created to help Bitfinex cover up a major hack it suffered in 2016.

This all paved the way for today’s dip. Back on December 6th, CTFC — the U.S. Commodity Futures Trading Commission — subpoenaed Bitfinex. The Hong Kong based exchange, which doesn’t accept US customers, was summoned to court in the US.

The dip was partly caused by Bloomberg reporting this yesterday afternoon without mentioning the original date of the order! This caused traders to panic and rumours of insider trading surged due to the growing amount of short positions.

Some say it’s ironic that the U.S. government is questioning private companies about their private reserves. Others are more optimistic about the situation, including Charlie Lee, Litecoin’s founder, who noted the fact that Tether continuing to issue tokens after the subpoena is good news!


Filter the noise and stay ahead of the pack

If you like short-term trading, follow today’s technical analysis on bitcoin’s resistance and support levels in NewsBTC or check the latest TradingView ideas!

If you like to hear it from the wolf, read Jordan Belfort’s (yes, the Wolf of Wall Street himself) urgent warning urging “everyone to sell bitcoin”!

If you like a good laugh in moments of fear, check this funny video parody of the Downfall film about Bitcoin Cash and Bitcoin’s new Lightning Network!


An insight a day could give you more profits to play

Samsung doesn’t seem to believe Bitcoin is going to die and just announced ‘mass production’ of ASIC mining equipment to compete with Bitmain, the current market leader.

Facebook doesn’t like how some of its users are falling into crypto scams promoted through their controversial advertising platform and have therefore blocked all ‘crypto ads’!

Some Reddit lawyers don’t like the FUD being created from the Tether situation and are trying to offer a rebuttal to the doomsday scenarios feared by most!

  • NEO
  • Lisk
  • falling knife
  • risk management
  • tether
  • bitfinex
  • Lightning Network
  • Dent